Investors may be unaware of the high risk associated with a high-return financial product and thus may purchase risky products inconsistent with their risk attitudes. We conducted an experiment and survey in Shenzhen, China, to measure individuals' risk preferences, financial literacy, and the...

This paper studies a financial contracting problem where a firm privately observes its cash flow and faces a limited liability constraint. The firm's collateral is piecemeal divisible and can only be liquidated continuously by resorting to the service of a costly third party, typically...

A central problem in vertical relationships is to minimize the mismatch between supply and demand. This paper studies a problem of contracting between a manufacturer and a retailer who privately observes the retail demand materialized after the contracting stage. Cash payments are bounded above...

We call a product customizable if some of its attributes can be adjusted by buyers after purchase. In this paper, we study a market in which the seller(s) exerts cognitive efforts to find the optimal product design, and retains the option to make the product customizable for buyers to adjust...