Research highlight
Passive Investing and the Rise of Mega-Firms
The Review of Financial Studies, 38(12), 3461–3496
The Tragedy of Complexity
Complexity can create value. At the same time, understanding more complex goods requires more of an agent’s attention. We show that equilibrium...
Forecasting Crashes with a Smile
We derive option-implied bounds on the probability of a crash in an individual stock, and argue a priori that the lower bound should be close to the...
Artificial intelligence and financial crises
The rapid adoption of artificial intelligence (AI) poses new and poorly understood threats to financial stability. We use a game-theoretic model to...
Shadow Banks on the Rise: Evidence Across Market Segments
This paper uses credit bureau data on 648 million retail loans in India to examine the comparative advantages of shadow banks across market segments...
The Structure of Leveraged Buyouts and the Free-Rider Problem
We study the structure of public firm buyouts in a model that features both the Berle-Means problem (lack of incentives) and the Grossman-Hart problem...
Why are there financial crises? Recent developments in theory
Annual Review of Financial Economics, 17, 77 - 92
Research highlight
Dynamic Coordination and Bankruptcy Regulations
The Review of Financial Studies, 39 (4), 1116 - 1176
Research highlight
Investor Memory and Biased Beliefs: Evidence from the Field
The Quarterly Journal of Economics, 140 (4), 2749–2804
