We present a simple theoretical model of adverse selection when lenders allow reduced documentation. The model shows how reduced documentation attracts both riskier borrowers and larger size loans. We then empirically test implications of the model using stated income loans originated during the...

This study explores the impacts a presale contract has on a developer’s pricing and production decisions in a game-theoretical framework. In an environment where developers have full capital market access, we find that both developers and buyers are indifferent between a presale and a...

This paper builds a model to provide a complementary explanation to the well-known IPO pricing puzzle. Unlike existing theories in the field, our model does not assume that one agent (issuer, underwriter, informed investor, or uninformed investor) has superior information over another, nor that...

We analyze the prices of owner-occupied housing in 97 metropolitan areas between 1980 and 2011. Our tests indicate that price changes exhibit positive serial correlation at the one year intervals, with subsequent reversals of price changes over longer intervals. Consistent with our simple model,...

We set up a game-theoretic model for a market where the presale method (to sell a property before its completion) can be used together with construction loans and mortgages as a developer's financing tools for project developments. This model captures the interactions and dynamics among four...