This paper analyzes whether in Italy the price of consumer loans is based on borrower specific risk. Mispricing could threat financial stability through negative effects on lenders' profitability; risk-based pricing also leads to a more efficient allocation of credit through lower prices for...

This paper examines a single-unit ascending auction where agents have interdependent values and observe multi-dimensional signals. The challenge is to characterize how the multi-dimensional signals observed by an agent are aggregated onto that agent's one-dimensional bid. The challenge is solved...

The leading economic explanation for tipping - that is, explanation why the practice is socially beneficial, not why individuals leave tips even though it is not narrowly advantageous to them - is that it confers an incentive to provide personal services. This fits many instances in which...

We show empirically that public credit information increases competition in credit markets. We access data that cover all credit card borrowers in Chile and include details about relationship borrowers have with each lender. We exploit a natural experiment whereby a non-bank lender's portfolio...

Platforms care about the quality of components they host. For example, a computer operating system is more popular - and thus more profitable - when the software is high quality. Some platforms offer special arrangements to high-quality firms - for example, Apple promotes high-quality Macintosh...

This study provides a comprehensive analysis of credit rating economics and draws conclusions on the nature of regulation. It starts with an overview of the credit rating industry and introduces a framework that structures multiple rating agency functions. At the heart of the credit rating...

Experimental Markets were used to examine whether individual probability judgment biases affect market prices. This issue is important to accountants because users of accounting information (especially investors) face competitive market environments. The expectation was that it would be more...

Foreign Investors are indeed guilty of destabilizing national financial markets where they are active. This paper analyzes the impact international investors have on the trading stability of financial markets. By calibrating GJR-GARCH models on overlapping, moving windows of daily returns for...

By generalizing the Leland and Pyle (1977) model to the case of multiple correlated assets, this paper studies the signaling and hedging behavior of an intermediary who sells multiple assets in financial markets. Based on information asymmetry, this paper demonstrates the intrinsic...

Is the reputation of a firm tradeable when the previous owner has to retire even though ownership change is observable? We consider a competitive market in which a share of owners must retire in each period. New owners, observing only recent profits, bid for the firms on sale. Customers are...