Papers
Moral hazard and the quest for linear contracts
Uploaded: Aug 4, 2025
This paper derives necessary and sufficient conditions under which the firstorder characterization of Holmström (1979) robustly produces affine solutions: a risk-neutral principal, an agent with logarithmic utility, and output whose distribution depends on effort through a one-parameter exponential family with...
The Color of Finance: Can Bank Capital Requirements Influence Transition to a Green Economy?∗
Uploaded: Aug 3, 2025
Using a general equilibrium model in which brown (polluting) and green (clean-energy) firms
compete and seek financing from banks, non-banks, or the capital market, we examine the effects
of higher capital requirements on brown bank loans designed to discourage such...
Environmental Disclosures in Global Supply Chains
Uploaded: Aug 2, 2025
Economies committed to environmental goals, such as mitigating global warming, face the challenge that pollution and emissions largely originate from activities in foreign countries. While governments may attempt to tax domestic firms’ sourcing of inputs from brown international firms, such...
Debt and the Optimal Incentives Over Time
Uploaded: Aug 1, 2025
Using a backward stochastic differential equation (BSDE) framework, we examine the principal-agent problem in a finite-horizon continuous-time setting where the agent’s effort is a continuous choice, and the principal can impose non-pecuniary punishments. We show that the agent’s optimal incentive...
Imperfect Competition and Moral Hazard in Financial Markets
Uploaded: Aug 1, 2025
I develop a model to compare the effects of moral hazard and imperfect competition in intermediary asset pricing, motivated by empirical evidence from rich trade-level data in Canadian stock markets. Intermediaries invest in multiple risky assets on
behalf of their...
Privacy-Enhanced Payment Systems
Uploaded: Jul 30, 2025
Technological innovations enable digital privacy, but pose fundamental conflicts between freedom and control. We study the design of privacy-enhanced payment systems, valued for legitimate transactions but vulnerable to illicit financial activities. We distinguish two dimensions of privacy: identity privacy, the...
