We examine the optimal contract design for fighting bribery and extortion in a standard principal-supervisor-agent hierarchy when information is soft for the supervisor-agent coalition but hard for the supervisor alone. This issue was first studied by Khalil, Lawarree, and Yun [Rand Journal of...

This chapter first provides an illustration of the benefits of using machine learning for forecasting relative to traditional econometric strategies. We consider the short-term volatility of Bitcoin market by realized volatility observations. Our analysis highlights the importance of accounting...

Almost all U.S. firms now announce earnings outside of regular trading hours. This paper studies how stock prices incorporate information in after-hours trading. I find slow prices adjustment accompanied by significant trading volume. During 2002-2012, 5,881 rule-based trading opportunities...

The rise of centralized mining pools for risk sharing does not necessarily undermine the decentralization required for permissionless blockchains: Each individual miner's cross-pool diversification and endogenous fees charged by pools generally sustain decentralization, because larger pools...

The rise of centralized mining pools for risk sharing does not necessarily undermine the decentralization required for permissionless blockchains: Each individual miner's cross-pool diversification and endogenous fees charged by pools generally sustain decentralization, because larger pools...

I show that simple profit-sharing contracts with decentralized control could empower individuals with their collective wisdom by coordinating actions guided by dispersed private information. This result parallels existing theories for financial markets, where the equilibrium market price...

Using data leaked by hackers from a major Bitcoin exchange, we find that more than 2% and up to 33% of all transactions are wash trades, a type of market manipulation in which traders clear their own limit orders to “cook” transaction records. Our finding provides direct evidence for the...

We present a model rationalizing the economic value of digital tokens for launching peer-to-peer platforms: By using the blockchain to transparently distribute tokens before the platform begins operation, a token sale overcomes later coordination failures between transaction counterparties...