A central problem in vertical relationships is to minimize the mismatch between supply and demand. This paper studies a problem of contracting between a manufacturer and a retailer who privately observes the retail demand materialized after the contracting stage. Cash payments are bounded above...

Investors may be unaware of the high risk associated with a high-return financial product and thus may purchase risky products inconsistent with their risk attitudes. We conducted an experiment and survey in Shenzhen, China, to measure individuals' risk preferences, financial literacy, and the...

This paper studies a financial contracting problem where a firm privately observes its cash flow and faces a limited liability constraint. The firm's collateral is piecemeal divisible and can only be liquidated continuously by resorting to the service of a costly third party, typically...

We study a retail financial market with naive investors who are unaware of possible financial fraud. In our model, firms strategically choose whether to offer normal or fraudulent products to possibly unaware investors. Having new firms in the market makes offering normal products less...