Models of the q theory typically assume that investments are determined by a specific approximating structured q model, hence ruling out perturbations due to a set of statistically nearby unstructured alternatives. This paper formulates a generalized framework, where concern to unstructured q...

I examine how the robustness of investment opportunities influence firm payout policy and cash holdings. By exploiting new measures, the perturbations of q, a novel counterintuitive yet reasonable fact emerge: low robustness of investment opportunities (high perturbations of q) is able to spur...

I propose a tractable model integrating dynamic internal capital allocation with imperfect patent protection, thereby endogenizing patent war as well as financing constraints. I emphasize the central importance of capital intangibility for corporate decisions when intangibles are insecure. The...

With the dramatic progress of artificial intelligence algorithms in recent times, it is hoped that algorithms will soon supplant human decision-makers in various fields, such as contract design. We analyze the possible consequences by experimentally studying the behavior of algorithms powered by...

I explore an intricate interaction between a firm’s risk exposure, intangible capital accumulation, and physical capital accumulation by using a unified dynamic investment model of capital allocation. The model emphasizes both the importance of the marginal value of the intangible capital and...

Conventional measurements of risk premiums are biased if the estimation models are potentially misspecified and unstable. Say, factor interactions is one of the crucial omitted specifications that standard models cannot involve. Motivated by this argument, we propose an interpretable...

Polynomial factor models (henceforth, PFM) represent a new class of factor models for high-dimensional panel data. We develop several econometric theories for factor models of latent factor interactions. Unlike approximate factor models (AFM), which are based on linear combinations of observed...

We develop a model of coordination and allocation of decentralized multi-sided markets, in which our theoretical analysis is promisingly optimizing the decentralized transaction packaging process at high-throughput blockchains or Web 3.0 platforms. In contrast to the stylized centralized...

This paper introduces the dual-contract design via Q-learning methods. In contrast to the standard principal-agent problem (a principal and an agent), we emphasize that the dual-contract problem can also be recognized as a dual-principal-agent problem (two principals and an agent). The method...