How should a firm measure a productive asset used as collateral in a credit agreement? To answer this question, we develop a model in which firms borrow funds subject to collateral constraints. We characterize the qualities of optimal asset measurements and analyze their interactions with...

Machine learning offers empirical methods to sift through accounting data sets with a large number of variables and limited a priori knowledge about functional forms. In this study, we show that these methods help detect and interpret patterns present in ongoing accounting misstatements. We use...

Executive compensation contracts use information from markets and accounting to elicit efficient incentives. We structurally estimate the contribution of each performance to quantify the relative importance of price versus accounting. For plausible risk-aversion coefficients consistent with the...

Decentralized finance (DeFi) lending has grown from nonexistent in 2017 to nearly 40 billion US Dollars in deposited funds in May 2022. Using cryptocurrency as collateral, the platforms match speculative margin trading with yield-seeking depositors lending coins pegged to the dollar (stable...