Raising cash in multiple stages can lower financing costs for an entrepreneur faced with multiple, differentially informed, strategic investors. By affecting investor incentives to participate in different rounds, the winner's curse problem can be partially alleviated. The results offer insight...

Regulators express growing concern over “predatory lending,” which we take to mean lending that reduces the expected utility of borrowers. We present a rational model of consumer credit in which such lending is possible, and identify the circumstances in which it arises with and without...

Regulators express growing concern over predatory loans, which we take to mean loans that borrowers should decline. Using a model of consumer credit in which such lending is possible, we identify the circumstances in which it arises both with and without competition. We find that predatory...

Building on the idea that precision of credit ratings matters for the efficiency of investors' portfolio decisions, the paper analyzes the equilibrium precision of ratings. Our analysis explains why ratings are noisy, exhibit rating inflation and vary across asset classes and over the economic...

It is shown that the Majoritarian Compromise of Sertel (1986) is subgame-perfect implementable on the domain of strict preference profiles, although it fails to be Maskin-monotonic and is hence not implementable in Nash equilibrium. The Majoritarian Compromise is Pareto-optimal and obeys SNIP...

Can comparative statements be credible even when absolute statements are not? For instance, can a professor credibly rank different students for a prospective employer even if she has an incentive to exaggerate the merits of each student? Or can an analyst credibly rank different stocks even if...

Sellers benefit on average from revealing information about their goods to buyers, but the incentive to exaggerate undermines the credibility of seller statements. When multiple goods are being auctioned, we show that ordinal cheap talk, which reveals a complete or partial ordering of the...