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Uploaded: Aug 1, 2024

Xavier Vives, Zhiqiang Ye | Working Paper No. 00141-00

Fintech Entry, Lending Market Competition, and Welfare

We study fintech entry and how it affects competition, investment, and welfare in a spatial model. We find that fintechs with inferior monitoring efficiency can successfully enter because of their superior flexibility in pricing. It follows that fintech borrowers are...

Uploaded: Aug 1, 2024

Xavier Vives, Zhiqiang Ye | Working Paper No. 00129-01

Information Technology and Lender Competition

We study how information technology (IT) affects lender competition, entrepreneurs’ investment, and welfare in a spatial model. The effects of an IT improvement depend on whether it weakens the influence of lender–borrower distance on monitoring costs. If it does, it...

Uploaded: Aug 1, 2024

Xavier Vives, Orestis Vravosinos | Working Paper No. 00130-02

Free entry in a Cournot market with overlapping ownership

We examine the effects of overlapping ownership among existing firms deciding whether to enter a product market. We show that in most cases—and especially when overlapping ownership is already widespread, an increase in the extent of overlapping ownership will harm...

Uploaded: Jun 24, 2024

Francesco Sangiorgi | Working Paper No. 00140-00

Hysteresis in price efficiency and the economics of slow moving capital

Will arbitrage capital flow into markets experiencing shocks, mitigating adverse effects on price efficiency? Not necessarily. In a dynamic model with privately informed capital-constrained arbitrageurs, price efficiency plays a dual role, determining both the profitability of new arbitrage and the...

Uploaded: Jun 12, 2024

Markus Baldauf, Christoph Frei, Joshua Mollner | Working Paper No. 00095-02

Block Trade Contracting

We study the optimal execution problem in a principal-agent setting. A client contracts to purchase from a dealer. The dealer hedges, buying from the market, creating temporary and permanent price impact. The client chooses a contract, which specifies payment as...

Uploaded: May 17, 2024

Markus Baldauf, Joshua Mollner | Working Paper No. 00096-01

Competition and Information Leakage

When seeking to trade in over-the-counter markets, institutional investors typically restrict both the number of potential counterparties they contact and the information they disclose (e.g., by requesting two-sided rather than one-sided quotes). We rationalize these important facts in a model...