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Liquidity in the Cross Section of OTC Assets

Guner Velioglu, Semih Uslu   Feb 06,2024

Working Paper No.00138-00

We develop a dynamic model of a multi-asset over-the-counter (OTC) market that operates via search and bargaining and empirically test... Read More

Siphoned Apart: A Portfolio Perspective on Order Flow Segmentation

Bart Yueshen Zhou, Markus Baldauf Joshua Mollner   May 16,2024

Working Paper No.00094-01

We study liquidity supply in fragmented markets. Market makers intermediate heterogeneous order flows, trading off spread revenue against inventory costs.... Read More

Published: Journal of Financial Economics, 2024, 154(), 103807-

Hysteresis in price efficiency and the economics of slow moving capital

James Dow , Jungsuk Han Francesco Sangiorgi   Jun 24,2024

Working Paper No.00140-00

Will arbitrage capital flow into markets experiencing shocks, mitigating adverse effects on price efficiency? Not necessarily. In a dynamic model... Read More

Block Trade Contracting

christoph frei, Markus Baldauf Joshua Mollner   Jun 12,2024

Working Paper No.00095-02

We study the optimal execution problem in a principal-agent setting. A client contracts to purchase from a dealer. The dealer... Read More

Published: Journal of Financial Economics, 2024, 160(), 103901-

Fintech Entry, Lending Market Competition, and Welfare

Zhiqiang Ye, Xavier Vives   Aug 01,2024

Working Paper No.00141-00

We study fintech entry and how it affects competition, investment, and welfare in a spatial model. We find that fintechs... Read More

The Rise of Factor Investing: Asset Market Implications and "Passive" Security Design

Douglas Xu, Shiyang Huang Lin William Cong (叢林)   Nov 21,2024

Working Paper No.00133-01

We model financial innovations such as Exchange-Traded Funds, smart beta products, and many index-based vehicles as composite securities (CSs) that... Read More

Flow-Based Arbitrage Pricing Theory

Yu An   Apr 30,2023

Working Paper No.00099-00

I introduce a new approach, model, and definition for analyzing demand effects in asset pricing. My approach generalizes arbitrage pricing,... Read More

Sustainable finance under regulation

Shiyang Huang , Alexandr Kopytov   Jul 22,2023

Working Paper No.00112-00

We build a model analyzing optimal environmental regulation in the presence of socially responsible investors. Investors care about sustainability of... Read More

Disagreement in Collateral Valuation

Michael Woeppel, Jordan Martel   Aug 03,2023

Working Paper No.00124-00

We present a model of secured lending in which borrowers and lenders agree to disagree about collateral values. Lenders' beliefs... Read More

Economic Growth through Diversity in Beliefs

Christian Heyerdahl-Larsen,Howard Kung, Philipp Illeditsch   Aug 20,2023

Working Paper No.00126-00

We study a macro-finance model with entrepreneurs who have diverse views about the likelihood that their ideas will lead to... Read More