Since the global financial crisis and the related restructuring of banking systems, bank concentration is on the rise in many countries. Consequently, bank size and its role for macroeconomic volatility (or: stability) is the subject of intense debate. This paper analyzes the effects of...

What explains the power-law distribution of top incomes? This paper tests the hypothesis that it is firm hierarchy that creates the power-law income distribution tail. Using the available case-study evidence on firm hierarchy, I create the first large-scale simulation of the hierarchical...

Abstract This paper uses an approach recently suggested by Gabaix (Eonometrica 2011) to investigate for the first time the role of idiosyncratic shocks to the largest firms in the dynamics of imports by firms from manufacturing industries. For Germany we find evidence that imports are power-law...

Power law behavior has been recognized to be a pervasive feature of many phenomena in natural and social sciences. While immense research efforts have been devoted to the analysis of behavioural mechanisms responsible for the ubiquity of power-law scaling, the strong theoretical foundation of...

We develop a strategic model of network interdiction in a non-cooperative game of flow. An adversary, endowed with a bounded quantity of bads, chooses a flow specifying a plan for carrying bads through a network from a base to a target. Simultaneously, an agency chooses a blockage specifying a...

This thesis will first criticize standard financial theory. The focus will be on return distributions, efficient market hypothesis and the independence of returns. Part two gives the intuition to look at markets in a different view. Namely the one proposed by B. Mandelbrot who has shown that...

We develop an analytical framework designed to solve and analyze heterogeneous-agent models that endogenously generate fat-tailed wealth distributions. We exploit the asymptotic linearity of policy functions and the analytical characterization of the Pareto exponent to augment the conventional...

Power laws in productivity and firm size are well-documented empirical regularities. As they are upper right-tail phenomena, this paper shows that assuming asymptotic power functions for various model primitives (such as demand and firm heterogeneity) are sufficient for matching these...

The first essay examines news and the cross section of returns. Using a sentiment score provided by Thomson Reuters to measure the tone of news articles, this paper examines monthly portfolio returns constructed from information about past news articles. The sentiment score is obtained from the...

Research background: studies of structures of incomes distributions have been performer for about 15 years. They indicate that there is no one model which describes the distributions in their whole range. This effect is explained by the existence of different mechanisms yielding to low-medium...