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Inventory Management, Dealers' Connections, and Prices in OTC Markets

Thierry Foucault,Peter Hoffmann, Jean-Edouard Colliard   Oct 08,2020

We propose a new model of trading in OTC markets. Dealers accumulate inventories by trading with end-investors and trade among... Read More

Asset Dissemination through Dealer Markets

Gabrielle Demange, Jean-Edouard Colliard   Oct 08,2020

In over-the-counter markets for assets such as bonds or securitizations, large volumes can be split into smaller pieces and gradually... Read More

Financial Restructuring and Resolution of Banks

Denis Gromb , Jean-Edouard Colliard   Oct 08,2020

How do resolution frameworks affect the private restructuring of distressed banks? We model a distressed bank's shareholders and creditors negotiating... Read More

Treasury Inconvenience Yields during the COVID-19 Crisis

Stefan Nagel,Zhaogang Song, Zhiguo He   Nov 07,2020

In sharp contrast to most previous crisis episodes, the Treasury market experienced severe stress and illiquidity during the COVID-19 crisis,... Read More

Open Banking: Credit Market Competition When Borrowers Own the Data

Jing Huang,Jidong Zhou, Zhiguo He   Nov 24,2020

Open banking facilitates data sharing consented by customers who generate the data, with a regulatory goal of promoting competition between... Read More

Leverage Dynamics without Commitment

Peter DeMarzo , Zhiguo He   Nov 24,2020

We characterize equilibrium leverage dynamics in a tradeoff model when the firm can continuously adjust leverage and cannot commit to... Read More

The Insurance is the Lemon: Failing to Index Contracts

Benjamin Hebert , Barney Hartman-Glaser   Jan 07,2019

We model the widespread failure of contracts to share risk using available indices. A borrower and lender can share risk... Read More

Liquidity Sentiments

Brett Green , Vladimir Asriyan William Fuchs   Mar 12,2019

We develop a rational theory of liquidity sentiments in which the market outcome in any given period depends on agents' expectations... Read More

Pricing and Liquidity in Decentralized Asset Markets

Semih Uslu   Mar 27,20194

I develop a search-and-bargaining model of endogenous intermediation in over-the-counter markets. Unlike the existing work, my model allows for rich... Read More

Published: Econometrica, 2019, 87(6), 2079-2140

The Good, the Bad, and the Complex: Product Design with Imperfect Information

Dana Foarta, Vladimir Asriyan Victoria Vanasco   Nov 05,20190

This paper explores the incentives of product designers to complexify products, and the resulting implications for overall product quality. In... Read More