We derive the effect of plausible deniability on asset risk premia in a dynamic setting with correlated firm values, systematic risk, and risk-averse investors. Firms optimally exercise American disclosure options, which are more valuable due to the possibility that other correlated firms may...

In 2005-08, over a dozen put warrants traded in China went so deep out of the money that they were certain to expire worthless. Nonetheless, each warrant was traded nearly three times each day at substantially inflated prices. This bubble is unique, because the underlying stock prices make the...

This paper addresses the question of how an institution might optimally manage the market risk of a given exposure. We provide an analytical approach to optimal risk management under the assumption that the institution wishes to minimize its Value-at-Risk (VaR) using options follows a geometric...

This paper develops an analytical framework for studying colonial investment from the perspective of neoclassical political economy. The distinguishing feature of colonial investment in this model is that the metropolitan government restricts the amount of investment in the colony in order to...

Why did the most prosperous colonies in the British Empire mount a rebellion? Even more puzzling, why didn't the British agree to have American representation in Parliament and quickly settle the dispute peacefully? At first glance, it would appear that a deal could have been reached to share...

This paper examines the relationship between elite identity and political outcomes from a theoretical and empirical perspective. Elite members with distinct economic and social identities vote for or against an extractive policy, which benefits them at the expense of the citizenry. Voting is...

How do elites mobilize commoners to participate in a war? How does war mobilization affect elite power after the war? We argue that these two questions are interconnected, as elites mobilize war often because war benefits them. We demonstrate these relationships using the setting of the...

Before the middle of the nineteenth century most laws enacted in the United States were special bills that granted favors to specific individuals, groups, or localities. This fundamentally inegalitarian system provided political elites with important tools that they could use to reward...

We study political dynasties in the United States Congress since its inception in 1789. We document historic and geographic patterns in the evolution and profile of political dynasties, study the extent of dynastic bias in legislative politics versus other occupations, and analyze the connection...