Papers

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Information sales and strategic trading

Francesco Sangiorgi , Diego Garcia   Aug 02,2023

Working Paper No.00116-00

We study information sales in financial markets with strategic risk-averse traders. Our main result establishes that the optimal selling mechanism... Read More

Asymmetric information, security design, and the pecking (dis)order

Dirk Hackbarth, Paolo Fulghieri , Diego Garcia   Aug 02,2023

Working Paper No.00117-00

We study a security design problem under asymmetric information, in the spirit of Myers and Majluf (1984). We introduce a... Read More

The Equilibrium Consequences of Indexing

Philip Bond , Diego Garcia   Aug 02,2023

Working Paper No.00118-00

We develop a benchmark model to study the equilibrium consequences of indexing in a standard rational expectations setting. Individuals incur... Read More

Optimal contracts with privately informed agents and active principals

Diego Garcia   Aug 02,2023

Working Paper No.00119-00

This paper considers an optimal contracting problem between an informed risk-averse agent and a principal, when the agent needs to... Read More

Noise and aggregation of information in large markets

Branko Urosevic, Diego Garcia   Aug 02,2023

Working Paper No.00120-00

We study a novel class of noisy rational expectations equilibria in markets with large number of agents. We show that,... Read More

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