Using unique data from multiple large-scale randomized marketing trials of pre-approved credit card solicitations, we find that consumers responding to a lender's inferior solicitation offers have poorer credit quality attributes. This finding supports the argument that riskier type borrowers...

This paper provides a unified theory to explain the onset of the financial crisis in 1998 and the striking economic recovery in Russia and the former Soviet Union afterwards. Before the crisis, the banking sector in these economies was stuck in a development trap in which the banking sector is...

We show that on-demand insurance contracts, an innovative form of coverage recently introduced through the InsurTech sector, can serve as a screening device. To this end, we develop a new adverse selection model consistent with Wilson (1977), Miyazaki (1977) and Spence (1978). Consumers have...

The subprime crisis would never have occurred had investors not been such enthusiastic consumers of subprime securities. The investors now say, somewhat self-servingly (but probably correctly), that they did not understand the securities - securities for which they were willing to pay very high...

This paper provides evidence regarding high-frequency trader (HFT) trading performance, trading costs, and effects on market efficiency using a sample of NASDAQ trades and quotes that directly identifies HFT participation. I find that HFTs engage in successful intra-day market timing, spreads...

We use a unique firm-level survey database compiled by the World Bank to examine the drivers of discouraged small businesses in various developing economies around the world. We confirm that older and larger firms are less likely to be discouraged and that the level of competition and the...

We use a unique firm-level survey database compiled by the World Bank to examine the drivers of discouraged small businesses in various developing economies around the world. We confirm that older and larger firms are less likely to be discouraged and that the level of competition and the...

This informal paper explores models of competitve insurance market equilibrium when individuals of initially similar apparent risk experience divergence in risk levels over time. The information structrue is modeled in three alternative ways: all insurers and insureds know risk at any point in...