We study information sales in financial markets with strategic risk-averse traders. Our main result establishes that the optimal selling mechanism is one of the following two: (i) sell to as many agents as possible very imprecise information; (ii) sell to...

This paper studies how relative consumption effects, in which a person's satisfaction with their own consumption depends on how much others are consuming, affect investors' incentives to acquire information. We find that such consumption externalities can generate complementarities in information...

We study the size and the existence of the mutual fund industry by generalizing the standard competitive noisy rational expectations framework with endogenous information acquisition. Since informed agents optimally choose to open mutual funds in order to sell their private...

We develop a model to study the efficiency of socially responsible investments (SRI) as a market-based mechanism to control firms' externalities. When responsible investors interact with profit-motivated investors, the former tend to concentrate on a subset of firms in the...

We build a model analyzing optimal environmental regulation in the presence of socially responsible investors. Investors care about sustainability of their portfolios but cannot fully resolve the pollution externality. Regulations, such as pollution tax and subsidies to clean firms, reduce...

Leveraging an institutional feature that Treasury auctions of different maturities are often held simultaneously, we propose  a method for estimating demand systems for Treasuries, avoiding the usual endogeneity issues in demand estimation. We implement our method using bidding data from...