Papers
Uploaded: Mar 5, 2019
Equity allocation and risk-taking in the intermediation chain
We build an equilibrium model of the capital structure and risk-taking in the originate-to-distribute intermediation chain in presence of absolute demand for safety by some investors and limited endowment by equity investors. Loan originators may expand investment by raising funds...
Uploaded: Mar 1, 2019
Endogenous Specialization and Dealer Networks
OTC markets exhibit a core-periphery interdealer network: 10-30 central dealers trade frequently and with many dealers, while hundreds of peripheral dealers trade sparsely and with few dealers. Existing work rationalize this phenomenon with exogenous dealer heterogeneity. We build a directed...
Uploaded: Feb 28, 2019
Debt, Innovation, and Growth
Recent empirical studies show that innovative firms heavily rely on debt financing. This paper develops a Schumpeterian growth model in which firmsā dynamic R&D, investment, and financing choices are jointly and endogenously determined. It then investigates the relation between debt...
Uploaded: Feb 19, 2019
Information Cascades and Threshold Implementation
Economic activities such as crowdfunding often involve sequential interactions, observational learning, and project implementation contingent on achieving certain thresholds of support. We incorporate endogenous all-or-nothing thresholds in a classic model of information cascade. We find that early supporters tap the...
Uploaded: Feb 6, 2019
FinTech Disruption, Payment Data, and Bank Information
We study the impact of FinTech competition on a monopolist bank that bundles payment processing and lending. In our model, consumers' payment data contain information about their credit quality. This information is valuable to the bank when making loans. Surprisingly,...
Uploaded: Feb 5, 2019
A Theory of Liquidity in Private Equity
We propose a model of Private Equity (PE) investment that can rationalize several empirical findings about fundraising and returns. General partners (GPs) possess superior investment skills and raise capital from Limited Partners (LPs) to finance illiquid projects within funds. The...
