We investigate the international shock propagation of the US quality of political signals (USQPOLS) to developed and emerging economies. We find an immediate rise in the real GDP of the developed economies as a result of a unit shock to USQPOLS. However, the shock effect only becomes significant...

This paper presents an analytical solution to the dynamic portfolio selection problem, considering transaction costs and signals with different persistence properties. Our proposed optimal portfolio policy involves a smooth adjustment towards a forward-looking portfolio that is composed of a...

This study examines the predictive power of the Delta Yield Curve in anticipating recessions in the U.S. economy, focusing on the difference between "US treasury securities at 10-year constant maturity" and "market rate on 3-month treasury bills" from 1962 to 2023. It identify three sequential...

Automated market makers (AMMs) are a new type of trading venue where the rules for liquidity provision and liquidity taking are considerably different from those of the traditional electronic trading venues. AMMs have become one of the key markets to trade crypto-currencies, whose liquidity is...

We consider decentralized platforms facilitating many-to-many matches between two sides of a marketplace. In the absence of direct matching, inefficiency in market outcomes can easily arise. For instance, popular supply agents may garner many units from the demand side, while other supply units...

A pre-condition for employer learning is that signals at labor market entry do not fully reveal graduates’ productivity. I model various distinct sources of signal imperfection—such as noise and multi-dimensional types—and characterize their implications for the private return to skill...

We present a buyer-seller setup in which seller type is private information and buyer utility is state contingent. States of nature are commonly unknown and the seller can design information through a Bayesian experiment on the state by facing a cost based on Shannon’s entropy. Costly...

Signalling social status through visible goods consumption is often perceived as a way in which individuals seek to emulate or move up within the community. This paper assesses the impact of transnational migration on status goods consumption in the Indian state of Kerala. We utilize the...

This paper investigates the informational content of online reviews. For the case of hotels, we model how the length of the stay shapes the variance of review scores. Grounded on violations of temporal monotonicity, errors in recall and hedonic adaptation theories, we first present a...

Signaling mechanisms are prevalent in two-sided markets because they typically help reduce information asymmetry and improve efficiency. While a growing number of studies focus on the actions of signal-senders, there has been little empirical research on how signal-receivers may react to the...