Individuals being audited potentially learn how to exploit the weaknesses inherent in any audit methodology if they face the same method many times. Hence, an auditor better deters fraud by randomizing her choice of methodology over time, thereby frustrating a would-be fraudster's ability to...

The U.S. Constitution includes many checks and balances that necessitate the ruling party to compromise with the opposition. I develop a model in which this feature prompts the President to compromise on the strength of the candidates nominated for positions in the federal government and...

A sudden need for liquidity prompts banks to sell their assets at a discount to obtain cash. This sale disturbs the economy and slows down growth because the buyers of the assets reduce their investments in positive NPV projects. Small banks do not internalize their own impact on prices, which...

We analyze the effects of banks’ “protected-weekend” policies, which aim at improving the work-life balance of junior bankers by guaranteeing them free time during weekends, in particular on Saturdays. We study how these policies affected bankers’ working hours, as assessed from taxi...

A principal delegates a problem to an agent who solves it using trial and error. The principal cannot observe the agent's actions or the outcomes of the trials. Trials are independent, heterogeneous, and privately costly. The optimal contract with commitment balances the agent's compensation...

We study the impact of trust in traditional finance on the consumer adoption of various fintech products, including cryptocurrencies, peer-to-peer lending, other crowdfunding, roboadvisors, and alternative payment solutions. Using a representative survey of Dutch households, an experiment on...