An issuer designs a contract and agents flexibly acquire information when deciding whether to accept it and provide liquidity. Unlike the existing literature, we do not impose any physical restriction on information structure to capture the idea of flexible information acquisition. Facing an...

We study a coordination game where players simultaneously acquire information prior to the play of the game. We allow general information acquisition technologies, modeled by a cost functional mapping from information structures. Costly local distinguishability is a property requiring that the...

We study optimal disclosure rules that alleviate inefficiencies caused by managerial private benefits. An entrepreneur raises capital from investors by designing a security and an associated covenant. The covenant allocates the control right of the project to the entrepreneur or investors in the...

Recent advances in IT and data science give firms more flexibility to process, store and communicate the growing volume and variety of performance data at a reduced and yet significant cost. In this paper, we study the impact of this cost and flexibility on employee monitoring and the internal...

Players choose a stochastic choice rule, assigning a probability of “investing” as a function of a state. Players receive a return to investment that is increasing in the proportion of others who invest and the state. In addition, they incur a small cost associated with adapting the...

This paper studies how disclosure of bank-specific information can mitigate systemic bank runs by reallocating systemic risk across different banks. We find that disclosure of information about vulnerability to systemic risk loads more of the constant aggregate systemic risk to less vulnerable...