—“Skin in the game”—money managers’ private investments in the funds they run—helps aligning potentially conflicted interests of investors and managers. Prior research acknowledges this benefit but remains silent about how investors are supposed to learn if fund managers have skin in...

We estimate the relative signal jump variance (RSJV) as the difference between the realized positive half-variance and negative half-variance divided by the realized variance using high-frequency intraday data and investigate its role in the cross-sectional pricing in the Chinese stock market....

We study a differential Riccati equation (DRE) with indefinite matrix coefficients, which arises in a wide class of practical problems. We show that the DRE solves an associated control problem, which is key to provide existence and uniqueness of a solution. As an application, we solve two...

Economists and management scholars have argued that the scope of incentives to increase cooperation in organizations is limited as their use signals the prevalence of free-riding among employees. This paper tests this hypothesis experimentally, using a sample of managers and employees from a...

Consumer reviews do not reflect absolute product quality but rather quality relative to the price. We analyze a reputation model with a privately informed monopolist repeatedly selling its product to uninformed but rational consumers, who learn about product quality through past reviews and the...

Should a challenger face rivals simultaneously or sequentially? If sequentially, should he face weak or strong rivals first? To address these questions, we study signaling in dynamic contests, where a privately-informed challenger faces a sequence of rivals. Against heterogenous opponents, the...

We provide novel empirical evidence suggestive of signaling effects of sovereign borrowing on a country's default risk. Using the S\&P sovereign rating as a proxy for default risk, we find significant state-contingent effects of sovereign debt growth on a country's rating, with the state being...

Awards are widely used as incentives in organizations. This paper situates awards in the broader incentives landscape and shows how the motivational value of awards can be understood with a parsimonious theoretical framework that considers three sources of value: the tangible component of an...

In a labor market with moral hazard, adverse selection, and overconfident workers, I compare the equilibrium contracts and efficiency under perfect competition and monopsony. In both market structures, screening workers according to their productivity-type requires the firm(s) to distort the...