Jangwoo Lee
Institution
CUHK
PhD Year
2021
matizoma@gmail.com
FTG Membership
Member
Website
https://sites.google.com/view/jangwoolee/home
Featured Work
Oct 10, 2025
Leverage Dynamics and Liquidity Management without Commitment
We analyze a continuous-time model in which shareholders can adjust both debt and cash without commitment. We derive a closed-form solution for leverage adjustments, payout policies, and security prices. Consistent with empirical evidence, we find that 1) despite the presence of the āleverage ratchets,ā a cash-rich firm frequently deleverages from its historical peak to low levels, while accumulating large liquid reserves; 2) a cash-strapped firm...
Aug 4, 2025
Exploitation Payoffs and Incentives for Exploration
We study a dynamic moral hazard problem involving initial exploration followed by exploitation, merging experimentation with dynamic corporate finance. We show how the methods and conclusions of the experimentation literature change when considering the exploitation phaseās non-monotonic payoff structure that arises naturally in the presence of moral hazard and limited liability. In particular, the agentās incentive constraints may be slack during the exploration phase, which...
