How do differences of opinion affect asset prices? Do investors earn a risk premium when disagreement arises in the market? Despite their fundamental importance, these questions are among the most controversial issues in finance. In this paper, we use a novel data set that allows us to directly...

How should an investor unwind a portfolio in the face of recurring and uncertain liquidity needs? We propose a model of portfolio liquidation in two periods to investigate this question, initially posed by Myron Scholes following the fall of Long Term Capital Management. We show that when the...

How does trust evolve in markets? What is the optimal level of government regulation and how does this intervention affect trust and economic growth? How do professional fees affect trust formation? In a two-stage theoretical model, we analyze the trust that evolves in markets, given the value...

Bargaining with bilateral asymmetric information is generally not efficient. In this paper, I develop a theoretical model to show that firms can recapture trade efficiency and avoid this surplus loss by adding an intermediary to the trading mechanism. This increase in total surplus motivates...

We study strategic disclosure timing by correlated firms in the presence of risk-averse investors. Firms delay disclosures in the hope that positively correlated firms will announce especially good news and lift their own price. Risk premia rise before disclosures, drop when disclosures occur,...

We use minute-by-minute Bloomberg online status microdata during 2017-2021 to directly study how hard and soft information collection affects equity analyst performance. Collection of hard information, proxied by office workday length, is positively associated with the quantity and timeliness of...

Investor sophistication has lagged behind the growing complexity of retail financial markets. To explore this, we develop a dynamic model to study the interaction between obfuscation and investor sophistication. Taking into account different learning mechanisms within the investor population, we...