The idea that uncertainty about a firm's profitability could increase its stock valuation has been proposed by Pastor and Veronesi (2003) to explain several phenomena in financial markets. We further examine this idea in a setup with both stocks and bonds, and show that unless a firm is deeply...

We examine the consequences of an intrusive debt-collection tactic that targets delinquent borrowers’ social circles. Our identification strategy relies on the fact that some of the delinquent loans are not worked on due to collection agents’ excessive workload. We show that this tactic...

Survey data are ubiquitous in the economics literature, ranging from unemployment rate and CPI to surveys of professional forecasts and consumer finances. However, their potential biases are rarely discussed. By randomizing the order of responses to the questions in an economic survey, we...

Safe and liquid assets, such as Treasury bonds, are money-like instruments that command a convenience yield. We analyze this in a search model of two assets that differ in liquidity and safety. In contrast to the reduced-form approach, which puts the safe and liquid asset in utility function, we...