This paper examines whether banks strategically incorporate their competitors' liquidity
mismatch policies when determining their own and the impact of these collective decisions …

We propose a tractable model of asset management in which benchmarking arises
endogenously, and analyze its welfare consequences. Fund managers' portfolios are not …

We show that, in the presence of correlated investment opportunities across firms, risk
sharing between firm shareholders and firm managers leads to compensation contracts that …

We introduce a novel empirical decomposition of equity price growth rates in terms of equity
holdings, based on market-clearing conditions. Although our sample holdings cover only an …

We provide new evidence on how performance-based compensation plans affect CEO
decision-making, especially risk-taking. Our main finding is that relative performance …

This paper examines whether and to what extent private firms learn from the stock market.
Using a large panel data set for the United Kingdom, I find that private firms' investment …

This paper studies the joint determination of optimal contracts and equilibrium asset prices
in an economy with multiple principal-agent pairs. Principals design optimal contracts that …

This paper theoretically examines how relative wealth concerns affect equilibrium
contracting and systemic risk-taking. We find that such externalities can generate pay for …

This paper analyzes the impact of incentive pay for bank managers on financial stability. The
study focuses on two banks owned by risk-neutral principals but operated by risk-averse …

This paper shows that in the presence of correlated investment opportunities across banks,
risk sharing between bank shareholders and bank managers leads to compensation …