In this paper, we propose a rigorous dynamic supernetwork theory for the integration of social networks with financial networks with intermediation in the presence of electronic transactions. We consider decision-makers with sources of funds, financial intermediaries, as well as demand markets...

This paper provides comprehensive theoretical and empirical analyses on bank lending under uncertainty. Our theory differentiates uncertainty from risk and shows that uncertainty-averse banks demand a premium in loan contracting for their exposure to the uncertainty. This premium gets larger as...

We propose a novel rationale for the existence of bank information sharing schemes. Banks may voluntarily disclose borrowers' credit history to maintain asset market liquidity. By sharing such information, banks mitigate adverse selection when selling their loans in secondary markets. This...

In a crisis, regulators and private investors can find it difficult, if not impossible, to tell whether banks facing runs are insolvent or merely illiquid. We introduce such an information constraint into a global-games-based bank run model with multiple banks and aggregate uncertainties. The...

We develop a theory of bank information sharing, highlighting the interactions between credit and labor markets. A better-informed relationship bank competes with a less informed foreign bank for borrowers under asymmetric information about borrowers' creditworthiness. Credit market competition...