We develop an economic model to compare equilibrium security of Proof-of-Work (PoW) versus Proof-of-Stake (PoS) blockchains. We derive general conditions to determine when PoW blockchains are more secure than otherwise equivalent PoS blockchains and vice versa. Applying real-world parameter values...

In a dynamic model of large traders who manage inventory risk, we show that a daily market closure coordinates liquidity. This coordination of liquidity can improve allocative efficiency relative to 24/7 trade, fully offsetting the costs of the closure. Some...

We develop a two-asset search-and-bargaining model of OTC trading to estimate frictions and welfare losses in the UK government and corporate bond markets. Using transaction-level data and a matched client sample, we find that both trading delays and intermediation frictions...

How should we expect firms to communicate with their shareholders in the presence of uncertainty? This paper studies a model of corporate communication in which cash flow variance is priced and stochastic. The model rationalizes ``biases'' for reports that are...

Regulating externalities is a major challenge when economic agents face uncertainty and disagreement. Traditional Pigouvian and Coasean approaches often struggle because they require either precise knowledge of externality costs or frictionless bargaining. We propose an "uncertainty-based regulation" (UBR) mechanism that...

Shocks to a bank’s ability to raise liquidity at short notice can trigger depositor panics. Why don’t banks take a more active role in managing these risks? We study contingent risk management (hedging) in a standard global-games model of a...