Cryptocurrency exchange market structure is fragmented, since cryptocurrencies are fungible, but customers cannot move freely across cryptocurrency exchanges. We build a model where exchanges with captive customers are linked by arbitrageurs, showing that ``star-shaped'' equilibria can exist, in which arbitrageurs...

This paper studies how artificial intelligence (AI) affects the finance labor market when
humans and AI perform different tasks in investment projects, and workers earn agency
rents that grow with project size. We identify two key effects of AI improvement: A freeriding
effect...

An L1-L2 blockchain ecosystem combines high transaction throughput with secure asset settlement, making it likely to play a central role in the migration of financial markets to blockchain-based infrastructure. We provide an economic model of endogenous financial activity within an...

Shareholder proposals are a common form of shareholder activism. Voting for shareholder proposals, however, is nonbinding since management has the authority to reject the proposal even if it received majority support from shareholders. We analyze whether nonbinding voting is an...

We study bank capital requirements as a tool to address climate-related financial risks and evaluate whether a prudential mandate for bank regulators remains appropriate in the presence of carbon externalities. We show that a prudential mandate maximizes welfare if carbon...

This paper studies security design by bidders with dispersed information about a common-value investment opportunity. Among a broad set of securities, bidders offer debt financing—the flattest securities. A first reason is that debt mitigates bidders' exposure to the winner's curse...