Despite the empirical prevalence of debt overhang, existing research has found little evidence of risk-shifting. To understand this discrepancy, we augment a traditional feedback model with an important feature: investors’ endogenous learning. We show that more ex-ante inefficient opportunities for...

We model the widespread failure of contracts to share risk using available indices. A borrower and lender can share risk by conditioning repayments on an index. The lender has private information about the ability of this index to measure the...

We present a general equilibrium model of labor market ows that features a periodic equilibrium in which turnover is high in some periods and low in others. If a firm fi nds itself in a periodic equilibrium, it is optimal...

We present a model of the market for advice in which advisers have conflicts of
interest and compete for heterogeneous customers through information provision. The
competitive equilibrium features information dispersion and partial disclosure. While
conflicted fees lead...

We study the implications of the interaction between rare disasters and financial development for sovereign debt markets. In our model, countries vary in their financial development, by which we mean the extent to which shocks can be hedged in inter-...

We study the disclosure policy of a regulator who oversees a monitor with reputation concerns. The monitor faces a strategic agent, who chooses how much to manipulate in response to the monitor’s reputation. Manipulation increases the arrival rate of a...