We develop a model of bailout stigma in which accepting bailouts may signal firms' financial troubles and worsen subsequent financing conditions. Bailout stigma can lead to low or even no take-up of otherwise attractive bailout offers, the failure of immediate market revival, or a government...

We study whether a default option attached to non-recourse mortgages improves borrowers' surplus from mortgage financing. By defaulting on mortgage debt, borrowers can save their non-collateralized income from being foreclosed. In exchange, borrowers must forgo nonmonetary surplus from retaining...

The revolving door practice, i.e. the recruitment of ex-regulators by regulated firms, has long been subject to criticism in Korea. Despite its importance, however, there are few studies on the economic impact of the revolving door. By applying a unique dataset of financial firms in Korea, it...

We present a model in which the agent reports a privately observed signal about the stochastic outcome of her action, while bearing a cost of misreporting her private information. If the agent receives a low payment contingent on her performance, it is very costly for the agent to misreport her...

"The revolving door practice, i.e. the recruitment of ex-regulators by regulated firms, has long been subject to criticism in Korea. Despite its importance, however, there are few studies on the economic impact of the revolving door. By applying a unique dataset of financial firms in Korea, it...

Equilibrium assumptions posit relations between different people's beliefs and behavior without describing a process that causes these relations to hold. I show that because equilibrium models do not describe a causal process whereby one endogenous variable affects another, attempts to decompose...

We study whether a default option attached to non-recourse mortgages improves borrowers' surplus from mortgage financing. By defaulting on mortgage debt, borrowers can save their non-collateralized income from being foreclosed. In exchange, borrowers must forgo non-monetary surplus from...

The revolving door practice, i.e. the recruitment of ex-regulators by regulated firms, has long been subject to criticism in Korea. Despite its importance, however, there are few studies on the economic impact of the revolving door. By applying a unique dataset of financial firms in Korea, it...

- The group-wide risks associated with business group affiliation must be reflected in capital regulations that assess the soundness of financial institutions. - When financial institutions hold shares with the intent to maintain control over a business group, the insolvency of one affiliate...