Regulations that require asset issuers to disclose payoff-relevant information to potential buyers sound like obvious measures to increase investor welfare. But in many cases, such regulations harm investors. In an equilibrium model, asset returns compensate investors for risk. By making...

The literature assessing whether mutual fund managers have skill typically regards skill as an immutable attribute of the manager or the fund. Yet, many measures of skill, such as returns, alphas, and measures of stock-picking and market-timing, appear to vary over the business cycle. Because...

Traditional asset pricing models predict that covariance between prices of different assets should be lower than what we observe in the data. This model generates high covariance within a rational expectations framework by introducing markets for information about asset payoffs. When information...

We explore how optimal information choices change the predictions of strategic models.When a large number of agents play a game with strategic complementarity, information choices exhibit complementarity as well: If an agent wants to do what others do, they want to know what others know. This...

We construct a model of counter-cyclical markups based on cyclical variation inthe dispersion of income across agents. The model is neoclassical in most respects, with monopolistically competitive firms facing a distribution of buyers that changes through time. Income dispersion is high during...

Much of the increase in female labor force participation in the post-war period has comefrom the entry of married women with young children. Accompanying this change has been arise in cultural acceptance of maternal employment. We argue that the concurrent S-shaped rise in maternal participation...

If an investor wants to form a portfolio of risky assets and can exert effort to collect information on the future value of these assets before he invests, which assets should he learn about? The best assets to acquire information about are ones the investor expects to hold. But the assets the...

Emerging equity markets witness occasional surges in the price level (frenzies) and increases in cross-market price dispersion (herds), accompanied by a flood of media coverage. Complementarity in information acquisition can explain these anomalies. Because information has a high fixed cost of...

When an economic boom ends, the downturn is generally sharp and short. When growth resumes, the boom is more gradual. Our explanation for this pattern rests on learning about productivity. When agents believe productivity is high, they work, invest, and produce more. More production generates...

Traditional asset pricing models predict that covariance between prices of different assets should be lower than what we observe in the data. This model generates this high covariance within a rational expectations framework by introducing markets for information about asset payoffs. When...