This paper examines the incentive provision when the agent can respond to risk by exerting effort to collect information about the underlying state and making corresponding decisions. Such effort is shown to be more valuable in a riskier environment and incentives can increase with...

We conducted two field experiments in a tree-thinning setting. In one experiment, we switched the pay of a randomly chosen half (the treatment group) from hourly wages to piece rate pay. Workers in the control group were paid hourly wages throughout. In the second experiment, workers were...

Real estate agents rely on current clients for referrals to generate future business; this paper aims to understand whether concern for referrals disciplines the agent. We compare the results for sellers who move to another area (and are thus less likely to provide referrals) with the results...

Activity in the U.S. market for mortgage servicing rights has increased in recent years. Incumbent servicers are at a significant informational advantage relative to potential buyers of these servicing rights, introducing the possibility of adverse selection. This paper marks the first...

Appraisal inflation is a prominent aspect of lax underwriting practice. The GSE May 2009 Home Valuation Code of Conduct (HVCC) aims to prohibit lenders from influencing appraisers. Refinance loans, without a transaction price, are potentially more susceptible to appraisal inflation than purchase...

By exploiting state-level variations in mortgage broker licensing regulations, we examine how licensing requirements affect mortgage loan performances and the mortgage origination market. Using data on private label securitized loans, we find that loans in states with a toughened broker...

Traditional agency theory treats risk as pure measurement error, yielding the standard prediction of risk-incentive tradeoff. This paper proposes a model in which the agent can respond to risk: he can exert effort to collect information about the underlying state in order to make correct...

Using supervisory Shared National Credit (SNC) loan level quarterly reports from 2010 to 2015 and DealScan loan origination data, we examine the impact of the 2013 Leveraged Lending Guidance on risk and structure of syndicated loans arranged by the largest banks. We find that the impact of this...

Oversight of a bureaucracy induces its agents to yield to consumers' demands excessively. Oversight is initiated by consumer complaints and consumers complain about an agent if they are wrongly denied the resource under allocation. This paper tests this prediction in a police setting. A riot...

Mortgage forbearance, where monthly scheduled payments are paused, was widely activated in response to the COVID-19 pandemic. This article offers an early examination of its effectiveness by examining borrower forbearance entry, exit, and post forbearance performance of residential mortgage...