The gold spot price is fixed by four banks every day at 10:30 am and 3 pm London time. This document describes a role-play simulation that replicates core features of the London gold fixing with the aim to better understand the incentives and the behaviour of the fixing participants. The game is...

This paper studies how short-sale constraints affect the informational efficiency of market prices and the link between prices and real economic activity. I show that under short-sale constraints security prices contain less information. However, short-sale constraints increase the...

Companies collected billions in premiums from peculiarly structured put options written on their own stock, while almost all of these puts expired worthless quarter after quarter. Buyers of these options, primarily investment banks, lost money as a result. Although these losses might seem...

The present paper, following the philosophical work of Robert Nozick, intends to develop the approach of simplicity in the economic investigation. This purpose contributes to structure a heuristic for projects of investigation that can serve like mark of discussion of grade projects in the...

The credit rating industry has historically been dominated by just two agencies, Moody's and Samp;P, leading to longstanding legislative and regulatory calls for increased competition. The material entry of a third rating agency (Fitch) to the competitive landscape offers a unique experiment to...

Hidden orders are widely used in major exchanges. This paper studies how hidden orders affect markets by introducing these orders to the limit order market model in Foucault et al. (2005). We investigate the equilibrium outcomes in an infinite-time horizon model with multiple price levels and...

If bankers are treated as wolves, they reply that they cannot behave as dolphins while swimming with sharks. What kind of new games and incentives are required to allow people to modify behavior? Clearly, education as we know it is not the answer for it produces rules that lead to shark like...

In financial markets, clients entrust their capital and data to financial infrastructure providers who are vulnerable to breaches. We develop a model in which infrastructure providers compete to provide secure and efficient client services, in the presence of a cyber-attacker. In equilibrium,...

This article explains the roots of financial crises in one of the oldest and most fundamental problems of commercial law: hidden leverage. Common law courts wrestled with this problem for centuries and developed a time - tested solution: the doctrine of secret liens. If the debtor becomes...

Computational methods both open the frontiers of economic analysis and serve as a bottleneck in what can be achieved. Using the quantum Monte Carlo (QMC) algorithm, we are the first to study whether quantum computing can improve the run time of economic applications and challenges in doing so....