Stablecoins rise to meet the demand for safe assets in decentralized finance. Stablecoin issuers transform risky reserve assets into tokens of stable values, deploying a variety of tactics. To address the questions on the viability of stablecoins, regulations, and the initiatives led by large...

We model banks’ liquidity holding decision as a simultaneous game on an interbank borrowing network. We show that at the Nash equilibrium, the contributions of each bank to the network liquidity level and liquidity risk are distinct functions of its indegree and outdegree Katz-Bonacich...

This paper hypothesizes a phenomenon—myopic misery—in which sadness creates a myopic focus on obtaining money now versus later, increasing intertemporal discount rates and thereby producing substantial financial costs. Experiments 1-3 randomly assigned participants to a sad- or...

The human mind tends to excessively discount the value of delayed rewards relative to immediate ones, with “hot†affective processes believed to drive desires for short-term gratification. Supporting this view, recent findings demonstrate that sadness exacerbates financial impatience...

Although people are quite aware of global warming, their beliefs about it may be malleable; specifically, their beliefs may be constructed in response to questions about global warming. Beliefs may reflect irrelevant but salient information, such as the current day’s temperature. This...

As organizations move towards increasingly group-based work environments, workers make more decisions on how much effort they will exert for the benefit of their coworkers. Past research on prosocial behavior has not compared people’s willingness to exert effort for others versus for...

Tax evasion is defined as the illegal nonpayment of a tax. Various arguments have been made over the centuries to justify tax evasion. Historically, the strongest arguments to justify tax evasion have been in cases where the people perceive the tax system to be unfair, where the government is...

The vast majority of anchoring research has found that judgments assimilate toward single anchors, but no papers have directly compared the impact of one anchor with that of multiple anchors. We hypothesized that the presence of additional anchors can reverse the usual anchoring effect. When one...

Fluid intelligence decreases with age, yet evidence about age declines in decision-making quality is mixed: Depending on the study, older adults make worse, equally good, or even better decisions than younger adults. We propose a potential explanation for this puzzle, namely that age differences...

We propose a dynamic theory of banking where the role of deposits is akin to that of productive capital in the classical q-theory of investment. As a cheap source of leverage, deposits typically create value for banks, but the marginal q of deposits can be negative. Deposit accounts commit banks...