We investigate the formation of market prices in a new experimental setting involving multi-period asset markets with state-dependent fundamentals. We are particularly interested in two informational aspects: (1) the role of traders who are informed about the true state and (2) the provision of...

We show how decentralized individual investments can efficiently allocate capital to innovating firms via equity crowdfunding. We develop a model where consumers have privately known consumption preferences and may act as investors. Consumers identify worthwhile investments based on their own...

We analyze the relationship between unemployment rate changes and government bond yields during and after the most recent financial crisis across nine industrialized countries. The study is conducted on a weekly basis and we therefore nowcast unemployment data, which are only available once a...

A policy maker (PM) needs information that only financial market traders know in order to implement his optimal policy, and traders may aggregate this information in asset prices. In such a setting, prices can become uninformative, because the PM reacts to information contained in prices,...

This paper extends the literature on predatory short selling and bailouts through a joint analysis of the two. We consider a model with informed short sales, as well as predatory short sales by an uninformed investor, which can trigger the inefficient liquidation of a firm. We obtain several...

Central bankers express concerns that central bank digital currencies (CBDCs) might disintermediate commercial banks and facilitate bank runs. We analyze these concerns in a DSGE framework and provide a rationale for the disintermediation of the banking sector. Our focus is on the central bank's...

In this paper, we modify the model by Gertler and Karadi (2011) such that it can be calibrated to the empirical elasticity of bank loan supply with respect to bank capital changes. We estimate this elasticity based on microeconomic data for all German banks. Their business model resembles that...

The number of firm bankruptcies is surprisingly low in economies with poor institutions. We study a model of bank-firm relationship and show that the bank?s decision to liquidate bad firms has two opposing effects. First, the bank receives a payoff if a firm is liquidated. Second, it loses the...

We investigate how well social collateral does as an alternative to traditional physical collateral. We do so by studying cosigned loans - a borrower´s loan is backed by the personal guarantee of a cosigner. We use a regression discontinuity approach with data from South Indian bidding Roscas....

In this paper we have investigated how the employment relationship, if it implies transfer of rents, may allow employers to control the voting behavior of their workers and lead to a strategic registration of voters. This is feasible when individual voting behavior is observable, as in open...