We develop a model of ESG investing where firms have private information about their ESG commitment: some value non-pecuniary payoffs from green investment, while others opportunistically greenwash. Lenders choose whether to include an ESG-monitoring covenant that imperfectly detects greenwashing. Monitoring...

We develop a model of index-linked rebalancing around reconstitution events. Index trackers trade off execution costs against tracking-error concerns, while speculators maximize profits given expected index-linked demand. The model shows speculators effectively act as liquidity providers at index reconstitution, and...

This paper presents a dynamic model of firm financing where firms use financial slack to reduce rent extraction by financiers with bargaining power. Financing is lumpy because it is optimal to bargain infrequently. Moreover, firms may finance ‘early’ before exhausting...

Government guarantees generate a multiplier effect: one dollar of tax-funded guarantees expands lending by more than one dollar. This multiplier is stronger under information-insensitive debt, as guarantees suppress costly private information production, relaxing borrowing constraints for all firms rather than...

Automated Market Makers (AMMs) are both liquidity sources and investment vehicles for market participants. This paper analyzes the risks and returns of liquidity provision (LP) investments in AMMs. In a continuous-time model, we show that LP returns decompose into a...

I introduce and test for preference for simplicity in choice under risk. I characterize the theory axiomatically, and derive its properties and unique predictions relative to canonical models. By designing and running theoretically-motivated experiments, I document that people value simplicity...