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...

This study examines currency competition between the Dollar and Bitcoin, focusing on monetary policy. Using theory and lab experiments, we show that proportional transfers (interest on Dollar balances) operate in two regimes. Depending on inflation expectations, policy may raise Dollar...

We study a dynamic problem of selling data without commitment to a budget-constrained receiver. The sender has access to a data-generating process, informative about a fundamental state, and can sell it either as granular observations (raw data) or summary statistics...

We develop a model of Decentralized Finance (DeFi) lending platforms that set interest rates as programmable functions of the utilization of available funds. These platforms are unable to incorporate off-chain information into the platform’s interest rates, leading to inefficient DeFi...

We evaluate approaches to estimating demand elasticities in dynamic asset markets, both theoretically and empirically. We establish strict, necessary conditions that the dynamics of instrumented asset price variation must satisfy for valid identification. We illustrate these insights in a general...

I study the equilibrium behavior of wealth distribution in a dynamic model of financial markets with multiple groups of rational investors who may differ in their information sets, as well as a group of irrational investors with incorrect beliefs. The...