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Overconfidence and market efficiency with heterogeneous agents

Branko Urosevic, Francesco Sangiorgi , Diego Garcia   Aug 02,2023

Working Paper No.00121-00

We study financial markets in which both rational and overconfident agents coexist and make endogenous information acquisition decisions. We demonstrate... Read More

Voters, Bailouts, and the Size of the Firm

Linda Schilling   Aug 03,2023

Working Paper No.00122-00

I present a political-economic theory to explain bailouts for failing firms in the presence of non-voters (foreigners). The governing... Read More

Smooth versus Harsh Regulatory Interventions and Policy Equivalence

Linda Schilling   Aug 03,2023

Working Paper No.00123-00

Policy makers have developed different forms of policy intervention for stopping, or preventing runs on financial firms. This paper... Read More

Disagreement in Collateral Valuation

Michael Woeppel, Jordan Martel   Aug 03,2023

Working Paper No.00124-00

We present a model of secured lending in which borrowers and lenders agree to disagree about collateral values. Lenders' beliefs... Read More

What type of transparency in OTC markets?

Maren Vairo, Piotr Dworczak   Aug 11,2023

Working Paper No.00125-00

Financial over-the-counter markets have been traditionally very opaque. Recent regulation promotes transparency in some of these markets by lowering search... Read More

Economic Growth through Diversity in Beliefs

Christian Heyerdahl-Larsen,Howard Kung, Philipp Illeditsch   Aug 20,2023

Working Paper No.00126-00

We study a macro-finance model with entrepreneurs who have diverse views about the likelihood that their ideas will lead to... Read More

Comparing Search and Intermediation Frictions Across Markets

Gabor Pinter, Semih Uslu   Aug 26,2023

Working Paper No.00127-00

In intermediated markets, trading takes time and intermediaries extract rents. We estimate a structural search-and-bargaining model to quantify these trading... Read More

Designing Stress Scenarios

Thomas Philippon, Cecilia Parlatore   Sep 25,2023

Working Paper No.00074-01

We study the optimal design of stress scenarios. A principal manages the unknown risk exposures of agents by asking them to... Read More

Contracting with a Present-Biased Agent: Sannikov meets Laibson

Alejandro Rivera   Sep 27,2023

Working Paper No.00128-00

This paper develops a methodology to solve dynamic principal-agent problems in which the agent features present-biased time preferences and naive... Read More

Blockchain Adoption in a Supply Chain with Manufacturer Market Power

Garud Iyengar,Jay Sethuraman,Wenjun Wang, Fahad Saleh   Oct 17,2023

Working Paper No.00079-01

We examine a supply chain with a single risk-averse manufacturer who purchases from suppliers and sells to consumers. Within this... Read More