We develop a unified theory of delegated capital management that extends the competitive, rational-expectations paradigm of Berk and Green (2004) from mutual funds to alternative assets. With perfectly competitive capital markets, we derive the optimal contract and account for observed...

We study pricing dynamics and risk-sharing in a market with rational investors and a Q-learning trader. The Q-learner's trading generates a feedback loop in prices: their demand for the risky security depends on their perceived benefit from trading, which in...

Generative AI has the potential to transform corporate innovation, but intellectual property (IP) created without sufficient human input is ineligible for protection by IP systems. We model a firm’s choice of AI versus human-capital use when investing in innovation, with...

We study markets in which traders acquire private information before submitting their schedules. We characterize conditions under which traders over-invest (respectively, under-invest) in information and trade excessively (respectively, insufficiently) on their private signals. These inefficiencies arise from a novel interaction...

Trading relationships in over-the-counter (OTC) markets are persistent and often exclusive, despite technological advances that have expanded clients' access to dealers. We rationalize this pattern in a model where trading relationships allow dealers to learn their clients' trading motives from...

We develop a theoretical framework that formalizes the conflicts of interest arising in continuation vehicles (CVs), in which general partners (GPs) transfer portfolio companies from an existing fund to a new vehicle they continue to manage. While CVs can enhance...