When the value of a pledgeable asset (or project) is uncertain, investors are tempted to examine it. The information cost is ultimately borne by the asset owner, reducing her financing capacity. A pecking order emerges. Debt generates a greater financing...

Behavioral biases in investors' expectations can lead to a decoupling of asset prices from fundamentals, and risks to financial stability. Central bank communication could be a tool to mitigate these issues, but there is no theoretical guidance on how and...

I study the stationary wealth distribution in a dynamic model of financial markets in which investors differ in their levels of investment sophistication. Some investors form beliefs rationally but have access to different information, while others hold incorrect beliefs. For...

We present a model of competition between ESG raters who acquire information about multiple unrelated categories and sell ratings. Raters specializing in different categories maximizes the amount of information transmitted and surplus, and can be the equilibrium outcome. When investors place a high...

Managing CEO succession is one of the board’s most important tasks. We develop a dynamic model of CEO succession to analyze executive hiring, firing, and entrenchment. The board learns about the CEO’s and successor’s ability and can decide to replace...

A property tax can be thought of as a capital structure, which divides a stream of rents into components accruing to the homeowner and to the government. Near-term rents mainly accrue to homeowners, and far-term rents mainly accrue to governments....