Various markets, particularly NASDAQ, have been under pressure from regulators and market participants to introduce call auctions for their opening and closing periods. We investigate the performance of call markets at the open and close from a unique natural experiment provided by the...

Creditors of a distressed borrower face a coordination problem. Even if the fundamentals are sound, fear of premature foreclosure by others may lead to pre-emptive actions, undermining the project. Recognition of this problem lies behind corporate bankruptcy provisions across the world, and it...

We document an apparently widespread violation of dominance in the horse-racing betting market in the UK, and use the systematic variation in the incidence of this violation to estimate the consumption value of gambling. Betting-shop gamblers in the UK face a tax on gambling of 10%, but have the...

We document that the deregulation of bank branching restrictions in theUnited States triggered a reallocation across sectors, with end effectson state-level volatility. This change in state-level volatility cannotbe explained simply by shifts in sector-level returns and volatility. Areallocation...

We consider a moral hazard setup wherein leveraged firms have incentivesto take on excessive risks and are thus rationed when they attempt toroll over debt. Firms can sell assets to alleviate rationing. Liquidatedassets are purchased by non-rationed firms but their borrowing capacityis also...

We examine how the banking sector may ignite the formation of assetprice bubbles when there is access to abundant liquidity. Inside banks,given lack of observability of effort, loan officers (or risk takers)are compensated based on the volume of loans but are penalized if bankssuffer a high...

We build an equilibrium model of commodity markets in which speculators are capital constrained, and commodity producers have hedging demands for commodity futures. Increases in producers' hedging demand or speculators' capital constraints increase hedging costs via price-pressure on futures....