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...
Research highlight
Investor Memory and Biased Beliefs: Evidence from the Field
The Quarterly Journal of Economics, 140 (4), 2749–2804
Polarization, Purpose and Profit
We present a model in which firms compete for workers who value nonpecuniary job attributes, such as purpose, sustainability, political stances, or...
Marketwide Memory
We propose a novel measure that allows us to study memory associations in financial markets over the course of several decades. Using our measure, we...
The surprising leadership effect accelerators have on startup employees
Entrepreneurship training programs across the world aim at boosting the success of startups. But even when startups fail, these programs bring...
