We study an equilibrium asset pricing model with several Lucas (1978) trees subject to persistent distress events, where the agent has incomplete information about the state of an underlying common factor and learns from the events occurring to each tree. Contrary to similar asset pricing models...

This paper studies the term structure implications of a simple structural model in which the representative agent displays ambiguity aversion, modeled by Multiple Priors Recursive Utility. Bond excess returns reflect a premium for ambiguity, which is observationally distinct from the risk...

This paper studies the term structure implications of a simple structural economy in which the representative agent displays ambiguity aversion, modeled by Multiple Priors Recursive Utility. Bond excess returns reflect a premium for ambiguity, which is observationally distinct from the risk...

We study the hiring and firing decisions of a firm in a Dual Labor market and in a Single Labor Contract. Under both regulations, to fire before a certain seniority threshold is similar to an American option that gives the right of firing at low costs. However, the value of the option is...

In the context of an equilibrium model with multiple risky assets, we map the characteristics of the network connecting firms' fundamentals to the cross-section of expected returns. We interpret network connectivity as the ability to transfer a distress state to other firms' fundamentals in a...

This paper analyzes fertility and consumption decisions when the costs of raising a child and parents' income are stochastic and correlated. We model the decision to have a child similarly to the decision to exercise an option in finance literature. We obtain several new results relative to...