We develop a basic framework to understand the organization of highly creative activities. Management faces a … creative talent. Procuring highly creative products in the market place, though, exposes the distributor to a fundamental risk …, distributors face the unavoidable winner's curse risk. Since this risk is, to a large extent, independent of the creative nature of …

model of time-varying labor income risk and study the implications of stochastic covariance between labor income and … dividends for the dynamics of the risk premiums on financial wealth and human capital …

Are fluctuations in firms' profitability risk a major cause of regular business cycles? We study this question within … such a model, surprise increases of risk lead to a wait-and-see policy for investment at the firm level and a decrease in … the size of firm-level risk fluctuations. We find that time-varying firm-level risk on its own is unlikely to be a major …

via both management and incentive fees, we show that (i) the high-powered incentive fees encourage excessive risk taking …Hedge fund managers are compensated via management fees on the assets under management (AUM) and incentive fees indexed …-generating strategy typically lowers the fund's risk-adjusted excess return due to frictions such as price pressure. When the manager is …

International risk-sharing has far-reaching implications both for economic policy and for basic research in economics …. When countries do not share risk, individuals in those countries experience fluctuations in their consumption levels that … are undesirable and possibly unnecessary. This paper extends and refines the study of international risk-sharing in two …

The paper tests three hypotheses concerning foreign equity investment in the presence of liquidity risk. First, the FDI …-to-FPI price differential is negatively related to liquidity risk (the "Price Discount Hypothesis"). The idea is that market …

models in which the exogenous state variables follow conditionally-linear stochastic processes displaying time-varying risk …. The first-order approximation is consistent with a conditionally-linear model in which risk is still time-varying but has … second-order approximation of the solution, instead, is sufficient to get this role. Moreover, risk premia, evaluated using …

stance. When decomposing the VIX into two components, a proxy for risk aversion and expected stock market volatility … ("uncertainty"), we find that a lax monetary policy decreases both risk aversion and uncertainty, with the former effect being …