Search Results
Showing results 1 to 10 of approximately 95.
(refine search)
Working Paper
Equilibrium with Mutual Organizations in Adverse Selection Economies
Boyd, John H.; Blandin, Adam; Prescott, Edward C.
(2015-01-09)
An equilibrium concept in the Debreu (1954) theory-of-value tradition is developed for a class of adverse selection economies and applied to the Spence signaling and Rothschild-Stiglitz (1976) adverse selection environments. The equilibrium exists and is optimal. Further, all equilibria have the same individual type utility vector. The economies are large with a finite number of types that maximize expected utility on an underlying commodity space. An implication of the analysis is that the invisible hand works for this class of adverse selection economies.
Working Papers
, Paper 717
Working Paper
Investor Sentiment and the (Discretionary) Accrual-return Relation
Sun, Bo; Jiang, Jiajun; Liu, Qi
(2020-09-18)
Discretionary accruals are positively associated with stock returns at the aggregate level but negatively so in the cross section. Using Baker-Wurgler investor sentiment index, we find that a significant presence of sentiment-driven investors is important in accounting for both patterns. We document that the aggregate relation is only prominent during periods of high investor sentiment. Similarly, the cross-section relation is considerably stronger in high-sentiment periods in both economic magnitude and statistical significance. We then embed investor sentiment into a stylized model of ...
International Finance Discussion Papers
, Paper 1300
Working Paper
Mixed Signals: Investment Distortions with Adverse Selection
Darst, Matt; Refayet, Ehraz
(2019-06-21)
We study how adverse selection distorts equilibrium investment allocations in a Walrasian credit market with two-sided heterogeneity. Representative investor and partial equilibrium economies are special cases where investment allocations are distorted above perfect information allocations. By contrast, the general setting features a pecuniary externality that leads to trade and investment allocations below perfect information levels. The degree of heterogeneity between informed agents' type governs the direction of the distortion. Moreover, contracts that complete markets dampen the impact ...
Finance and Economics Discussion Series
, Paper 2019-044
Working Paper
Financial contracting with enforcement externalities
Drozd, Lukasz A.; Serrano-Padial, Ricardo
(2016-01-20)
Contract enforceability in financial markets often depends on the aggregate actions of agents. For example, high default rates in credit markets can delay legal enforcement or reduce the value of collateral, incentivizing even more defaults and potentially affecting credit supply. We develop a theory of credit provision in which enforceability of individual contracts is linked to aggregate behavior. The central element behind this link is enforcement capacity, which is endogenously determined by investments in enforcement infrastructure. Our paper sheds new light on the emergence of credit ...
Working Papers
, Paper 16-1
Working Paper
Employment Dynamics in a Signaling Model with Workers' Incentives
Weingarden, Alison E.
(2017-04)
Many firms adjust employment in a "lumpy" manner -- infrequently and in large bursts. In this paper, I show that lumpy adjustments can arise from concerns about the incentives of remaining workers. Specifically, I develop a model in which a firm's productivity depends on its workers' effort and workers' income prospects depend on the firm's profitability. I use this model to analyze the consequences of demand shocks that are observed by the firm but not by its workers, who can only try to infer the firm's profitability from its employment decisions. I show that the resulting signaling model ...
Finance and Economics Discussion Series
, Paper 2017-040
Working Paper
Moldy Lemons and Market Shutdowns
Chang, Jin-Wook; Darst, Matt
(2022-03-23)
This paper studies competitive market shutdowns due to adverse selection, where sellers post nonexclusive menus of contracts. We first show that the presence of the worst type of agents (moldy lemons) causes markets to fail only if their mass is sufficiently large. We then show that a small mass of moldy lemons can lead to a large cascade of exits when buyers possess outside options. Our results suggest a parsimonious way of generating sudden market shutdowns without relying on institutional details or imposing additional structure on the model. Thus, the simple insights on the properties of ...
Finance and Economics Discussion Series
, Paper 2022-013
Working Paper
Financial Contracting with Enforcement Externalities
Drozd, Lukasz A.; Serrano-Padial, Ricardo
(2018-10-18)
We study the negative feedback loop between the aggregate default rate and the efficacy of enforcement in a model of debt-financed entrepreneurial activity. The novel feature of our model is that enforcement capacity is accumulated ex ante and thus subject to depletion ex post. We characterize the effect of shocks that deplete enforcement resources on the aggregate default rate and credit supply. In the model default decisions by entrepreneurs are strategic complements, leading to multiple equilibria. We propose a global game selection to overcome equilibrium indeterminacy and show how shocks ...
Working Papers
, Paper 18-21
Journal Article
How Well Does Agency Theory Explain Executive Compensation?
Gayle, George-Levi; Li, Chen; Miller, Robert A.
(2018)
As the share of all income going to the top 1 percent has risen over the past four decades, so has the share of top incomes coming from labor income relative to capital income. The rise in labor income is mainly due to the explosion in executive compensation over the same period?mostly because of the increase in executives being paid with stocks, options, and bonuses. The principal-agent model explains the reason for such compensation instead of a flat salary. Yet hundreds of papers in economics, finance, accounting, and management have reached no consensus on whether executive compensation ...
Review
, Volume 100
, Issue 3
, Pages 201-36
Working Paper
An Information-Based Theory of Financial Intermediation
Sultanum, Bruno; Trachter, Nicholas; Bethune, Zachary
(2019-07-02)
We advance a theory of how private information and heterogeneous screening ability across market participants shapes trade in decentralized asset markets. We solve for the equilibrium market structure and show that the investors who intermediate trade the most and interact with the largest set of counterparties must have the highest screening ability. That is, the primary intermediaries are those with superior information?screening experts. We provide empirical support for the model?s predictions using transaction-level micro data and information disclosure requirements. Finally, we study the ...
Working Paper
, Paper 19-12
Working Paper
Fiscal Forward Guidance: A Case for Selective Transparency
Waki, Yuichiro; Fujiwara, Ippei
(2017-06-01)
Should the fiscal authority use forward guidance to reduce future policy uncertainty perceived by private agents? Using dynamic stochastic general equilibrium models, we examine the welfare effects of announcing future fiscal policy shocks. Analytical as well as numerical experiments show that selective transparency is desirable?announcing future fiscal policy shocks that are distortionary can be detrimental to ex ante social welfare, whereas announcing nondistortionary shocks generally improves welfare. Sizable welfare gains are found with constructive ambiguity regarding the timing of a ...
Globalization Institute Working Papers
, Paper 318
FILTER BY year
FILTER BY Bank
Board of Governors of the Federal Reserve System (U.S.) 19 items
Federal Reserve Bank of St. Louis 18 items
Federal Reserve Bank of Philadelphia 16 items
Federal Reserve Bank of New York 11 items
Federal Reserve Bank of Richmond 9 items
Federal Reserve Bank of Chicago 6 items
Federal Reserve Bank of Dallas 4 items
Federal Reserve Bank of Minneapolis 4 items
Federal Reserve Bank of Cleveland 3 items
Federal Reserve Bank of Kansas City 2 items
Federal Reserve Bank of Atlanta 1 items
Federal Reserve Bank of Boston 1 items
Federal Reserve Bank of San Francisco 1 items
show more (8)
show less
FILTER BY Series
Working Papers 33 items
Finance and Economics Discussion Series 15 items
Staff Reports 10 items
Working Paper 9 items
Working Paper Series 6 items
Globalization Institute Working Papers 4 items
International Finance Discussion Papers 4 items
Review 4 items
Opportunity and Inclusive Growth Institute Working Papers 2 items
Research Working Paper 2 items
Chicago Fed Letter 1 items
Consumer Finance Institute discussion papers 1 items
Economic Policy Review 1 items
FRB Atlanta Working Paper 1 items
Supervisory Research and Analysis Working Papers 1 items
Working Papers (Old Series) 1 items
show more (11)
show less
FILTER BY Content Type
Working Paper 78 items
Report 10 items
Journal Article 5 items
Discussion Paper 1 items
Newsletter 1 items
FILTER BY Author
Sultanum, Bruno 7 items
Verani, Stéphane 7 items
Espino, Emilio 5 items
Sanchez, Juan M. 5 items
Bloedel, Alex 4 items
Foley-Fisher, Nathan 4 items
Gorton, Gary 4 items
Krishna, R. Vijay 4 items
Leukhina, Oksana 4 items
Ravikumar, B. 4 items
Veracierto, Marcelo 4 items
Bethune, Zachary 3 items
Drozd, Lukasz A. 3 items
Liu, Qi 3 items
Serrano-Padial, Ricardo 3 items
Sun, Bo 3 items
Trachter, Nicholas 3 items
Zetlin-Jones, Ariel 3 items
Zhang, Yuzhe 3 items
Andolfatto, David 2 items
Asako, Yasushi 2 items
Chatterjee, Satyajit 2 items
Cirelli, Fernando 2 items
Cisternas, Gonzalo 2 items
Copeland, Adam 2 items
Corbae, Dean 2 items
Cordell, Lawrence R. 2 items
Dam, Kaniska 2 items
Darst, Matt 2 items
Dempsey, Kyle 2 items
Grochulski, Borys 2 items
Gross, Till 2 items
Jarque, Arantxa 2 items
Khan, Aubhik 2 items
Kolb, Aaron 2 items
Kozlowski, Julian 2 items
Lee, Michael Junho 2 items
Leitner, Yaron 2 items
Lester, Benjamin 2 items
Nosal, Ed 2 items
Popov, Latchezar 2 items
Riezman, Raymond 2 items
Rios-Rull, Jose-Victor 2 items
Ritter, Dubravka 2 items
Sengupta, Rajdeep 2 items
Shourideh, Ali 2 items
Townsend, Robert M. 2 items
Ueda, Kozo 2 items
Venkateswaran, Venky 2 items
Acosta, Miguel 1 items
Aksu, Ege 1 items
An, Xudong 1 items
Anton, Arturo 1 items
Armstrong, Christopher S. 1 items
Attanasio, Orazio 1 items
Balakrishnan, Sidhya 1 items
Beltran, Daniel O. 1 items
Benson, Alan 1 items
Bettinger, Eric 1 items
Blandin, Adam 1 items
Boyd, John H. 1 items
Branch, William A. 1 items
Braun, R. Anton 1 items
Carrington, William J. 1 items
Cetemen, Doruk 1 items
Chang, Jin-Wook 1 items
Chen, Yunmin 1 items
Chien, YiLi 1 items
Cipriani, Marco 1 items
Cocco, Alessandro 1 items
Duffie, Darrell 1 items
Durdu, Bora 1 items
Eisenbach, Thomas M. 1 items
Elul, Ronel 1 items
Ennis, Huberto M. 1 items
Fallick, Bruce 1 items
Fujiwara, Ippei 1 items
Funaki, Yukihiko 1 items
Garratt, Rod 1 items
Gayle, George-Levi 1 items
Gomis-Porqueras, Pedro 1 items
Guarino, Antonio 1 items
Guay, Wayne R. 1 items
Hartley, Jonathan S. 1 items
Hertzberg, Andrew 1 items
Ikeda, Daisuke 1 items
Jia, Chengcheng 1 items
Jiang, Jiajun 1 items
Kam, Timothy 1 items
Keister, Todd 1 items
Klee, Elizabeth C. 1 items
Kofoed, Michael S. 1 items
Kopecky, Karen A. 1 items
Koreshkova, Tatyana 1 items
Kovrijnykh, Natalia 1 items
Li, Chen 1 items
Liberman, Andres 1 items
Livshits, Igor 1 items
Lucca, David O. 1 items
Maniff, Jesse Leigh 1 items
Martin, Antoine 1 items
Mehran, Hamid 1 items
Melcangi, Davide 1 items
Mendoza, Enrique G. 1 items
Mikhed, Slava 1 items
Miller, Robert A. 1 items
Monge-Naranjo, Alexander 1 items
Morgan, Donald P. 1 items
Nakamura, Leonard I. 1 items
Owyang, Michael T. 1 items
Paravisini, Daniel 1 items
Pastorino, Elena 1 items
Petrosky-Nadeau, Nicolas 1 items
Pierri, Nicola 1 items
Prescott, Edward C. 1 items
Prescott, Edward Simpson 1 items
Raina, Sahil 1 items
Refayet, Ehraz 1 items
Rocheteau, Guillaume 1 items
Rodziewicz, David 1 items
Roszbach, Kasper 1 items
Rungcharoenkitkul, Phurichai 1 items
Salcedo, Bruno 1 items
Scholnick, Barry 1 items
Shin, Chae Hee 1 items
Sojourner, Aaron 1 items
Tang, Sharon 1 items
Tanner, Noam 1 items
Thomas, Charles P. 1 items
Timmer, Yannick 1 items
Turen, Javier 1 items
Umyarov, Akhmed 1 items
Uthemann, Andreas 1 items
Uto, Nobuyuki 1 items
Viswanathan, S 1 items
Waki, Yuichiro 1 items
Waller, Christopher J. 1 items
Warner, Michael 1 items
Webber, Douglas 1 items
Webber, Douglas A. 1 items
Weber, Joseph P. 1 items
Weingarden, Alison E. 1 items
Williams, Basil 1 items
Winkler, Fabian 1 items
Wong, Russell 1 items
Yang, Yilin 1 items
Yilmaz, Bilge 1 items
Zhang, Man 1 items
Zhou, Ruilin 1 items
de Groot, Oliver 1 items
show more (145)
show less
FILTER BY Jel Classification
G21 19 items
D86 18 items
G14 16 items
D83 12 items
E44 9 items
G32 9 items
E58 8 items
C73 6 items
D30 6 items
G28 6 items
D14 5 items
D31 5 items
D53 5 items
D80 5 items
D84 5 items
E32 5 items
G01 5 items
G23 5 items
L14 5 items
D43 4 items
D52 4 items
E61 4 items
F10 4 items
G18 4 items
G51 4 items
I38 4 items
J65 4 items
M52 4 items
C63 3 items
C72 3 items
D42 3 items
E21 3 items
G12 3 items
H55 3 items
I22 3 items
L13 3 items
O16 3 items
C61 2 items
D18 2 items
D41 2 items
E52 2 items
E62 2 items
F13 2 items
G22 2 items
G24 2 items
G30 2 items
G33 2 items
G38 2 items
I26 2 items
J31 2 items
J63 2 items
L25 2 items
M55 2 items
O17 2 items
O25 2 items
O43 2 items
C13 1 items
C62 1 items
C68 1 items
D02 1 items
D13 1 items
D20 1 items
D39 1 items
D46 1 items
D47 1 items
D62 1 items
D78 1 items
D81 1 items
D91 1 items
D92 1 items
E02 1 items
E13 1 items
E30 1 items
E4 1 items
E40 1 items
E43 1 items
E50 1 items
E60 1 items
F4 1 items
F41 1 items
G29 1 items
G34 1 items
H20 1 items
H21 1 items
H25 1 items
H30 1 items
H81 1 items
H83 1 items
I13 1 items
I20 1 items
I23 1 items
I28 1 items
J20 1 items
J21 1 items
J33 1 items
J41 1 items
J64 1 items
K12 1 items
K42 1 items
L86 1 items
M12 1 items
M40 1 items
M41 1 items
M42 1 items
M50 1 items
M51 1 items
O12 1 items
O13 1 items
O22 1 items
O30 1 items
O36 1 items
Q54 1 items
show more (108)
show less
FILTER BY Keywords
Adverse selection 10 items
private information 10 items
Asymmetric information 7 items
Immiseration 6 items
Screening 5 items
Financial crises 5 items
liquidity 5 items
Asset pricing 4 items
Banking system 4 items
Price informativeness 4 items
recursive contracts 4 items
Moral Hazard 4 items
Signaling 4 items
business cycles 4 items
persistent private information 4 items
bank regulation 3 items
financial fragility 3 items
financial intermediation 3 items
inequality 3 items
insurance 3 items
Incomplete Markets 3 items
Job Search 3 items
Securitization 3 items
Transparency 3 items
credit crunch 3 items
global games 3 items
heterogeneity 3 items
heterogeneous agents 3 items
mechanism design 3 items
Bankruptcy 2 items
Capital accumulation 2 items
Commitment 2 items
Contracts 2 items
Decentralized markets 2 items
Efficiency 2 items
IDR 2 items
ISA 2 items
Informality 2 items
Investment 2 items
Managerial compensation 2 items
Mexico 2 items
One-period contract 2 items
UISA 2 items
Unemployment Insurance 2 items
asset issuance 2 items
backloaded incentives 2 items
bilateral trade 2 items
contract enforcement 2 items
credit cycles 2 items
default spillovers 2 items
dynamic contracting 2 items
exporter dynamics 2 items
higher education 2 items
income-driven repayment 2 items
intermediation 2 items
international trade 2 items
long-term financial contracts 2 items
optimal contracts 2 items
optimal deposit contract 2 items
principal-agent problems 2 items
private information 2 items
savings accounts 2 items
student debt 2 items
Auto loans 2 items
Bank runs 2 items
Computational methods 2 items
Consumer Credit 2 items
Credit Scores 2 items
Imperfect Competition 2 items
Infant Industry 2 items
Monitoring 2 items
Persistent Private Information. 2 items
Protection 2 items
Risk sharing 2 items
Search Theory 2 items
Structural estimation 2 items
Time Consistency 2 items
Unsecured Consumer Credit 2 items
Absolute immiseration 1 items
Accrual anomaly 1 items
Asymmetric 1 items
Bailouts 1 items
Bank Competition 1 items
Banks 1 items
Bayesian persuasion 1 items
Bilateral Insurance 1 items
Budget constraints 1 items
CDO 1 items
CEO compensation 1 items
CEO replacement 1 items
Cash transfers 1 items
Corporate hedging 1 items
Cost Of Capital 1 items
Costly state verification 1 items
Counterfeiting Threat 1 items
Credit Bureau 1 items
Credit Default Swaps 1 items
Credit History 1 items
Credit rationing 1 items
Debt Dilution 1 items
Demand shocks 1 items
Dispersed information 1 items
Displaced workers 1 items
Displacement 1 items
Downsizing 1 items
Dynamic mechanism design 1 items
Earnings management 1 items
Enforcement 1 items
Excessive risk-taking 1 items
Exchange Rates 1 items
Fed models 1 items
Federal Open Market Committee 1 items
Financial Stability 1 items
Financial accelerator 1 items
Financial regulation 1 items
IBR 1 items
ICR 1 items
IT Adoption 1 items
Imperfect monitoring 1 items
Information Aggregation 1 items
Intertemporal wedges 1 items
Inverse Euler equation 1 items
Investor sentiment 1 items
Labor 1 items
Labor demand 1 items
Layoffs 1 items
Learning 1 items
Lemons 1 items
Loan Maturity 1 items
Long-term rates 1 items
Market Integration 1 items
Market unraveling 1 items
Mechanism design approach 1 items
Medicaid 1 items
Mirrlees economies 1 items
Misperception 1 items
Monetary policy shocks 1 items
Mortgage default 1 items
Multiple Currencies 1 items
Natural rate of interest 1 items
Non-Performing Loans 1 items
Non-exclusive contracting 1 items
Non-transferable utility 1 items
Nonlinear pricing 1 items
Nonnegative martingale 1 items
ODE splicing 1 items
Occasionally binding constraints 1 items
Online labor markets 1 items
Online ratings 1 items
Optimal delegation 1 items
Over-the-counter markets 1 items
Overconfidence 1 items
Overreaction 1 items
Pay-for-luck 1 items
Pecuniary Externality 1 items
Personnel 1 items
Precautionary savings 1 items
Predatory lending 1 items
Public Information 1 items
Ratings 1 items
Regulation 1 items
Relative wealth concerns 1 items
Repeated Games 1 items
Reputation 1 items
Second best 1 items
Securities markets 1 items
Sequential screening 1 items
Signalling 1 items
Social insurance 1 items
State capacity 1 items
Sudden stops 1 items
Supervision 1 items
Technology 1 items
Treasuries 1 items
Uncertainty 1 items
activism 1 items
adverse selection equilibrium 1 items
agency costs 1 items
aggregation 1 items
bank incentives 1 items
bank supervision 1 items
banking and finance 1 items
bankruptcy reorganization 1 items
board structure 1 items
booms 1 items
capital structure 1 items
central bank balance sheets 1 items
central banks 1 items
conformity 1 items
contingent debt 1 items
continuous time 1 items
contracting 1 items
corporate governance 1 items
corporate transparency 1 items
credit 1 items
credit risks 1 items
data misreporting 1 items
default 1 items
delegation 1 items
deliberation 1 items
dynamic incentives 1 items
dynamic moral hazard 1 items
earnings loss 1 items
education finance 1 items
education insurance 1 items
enforcement capacity 1 items
executive compensation 1 items
fast reflection 1 items
fed funds 1 items
financial accounting 1 items
financial aid 1 items
financial contracting 1 items
financial crisis 1 items
financial development 1 items
financial distress 1 items
financial economics 1 items
financial institutions 1 items
financial regulations 1 items
financial restructuring 1 items
financial transaction tax 1 items
firm dynamics 1 items
firm subsidy 1 items
fraud 1 items
hedge funds 1 items
high-powered incentives 1 items
human capital 1 items
incentive compensation 1 items
incentives 1 items
income insurance 1 items
income- contingent loans 1 items
income-based repayment 1 items
income-contingent financing 1 items
income-contingent repayment 1 items
income-share agreement 1 items
income-share agreements 1 items
informal contracts 1 items
information asymmetry 1 items
information design 1 items
information disclosure 1 items
insider trading 1 items
instantaneous control 1 items
insurance rejections 1 items
inter-dealer markets 1 items
internal-risk models 1 items
latent semantic analysis 1 items
limited commitment 1 items
limited enforcement 1 items
liquidation 1 items
long-term care insurance 1 items
market microstructure 1 items
matching 1 items
model-based regulation 1 items
monetary policy 1 items
monitoring costs 1 items
mutual organization 1 items
natural language processing 1 items
noisy signaling 1 items
payments 1 items
performance pricing 1 items
personal loans 1 items
platforms 1 items
private information 1 items
private monitoring 1 items
quitting 1 items
random search 1 items
rational inattention 1 items
reflective dynamics 1 items
regulatory arbitrage 1 items
relative immiseration 1 items
relative performance 1 items
repo rates 1 items
reserves 1 items
search frictions 1 items
separating contract 1 items
shadow banks 1 items
solution methods 1 items
startups 1 items
sticky Brownian motion 1 items
stress tests 1 items
student loan 1 items
student loan repayment 1 items
student loans 1 items
the core 1 items
theory of value 1 items
time use 1 items
unemployment 1 items
show more (317)
show less