When private firms are acquired, buyers commonly rely on seller financing and earnouts. Using a novel database of private acquisitions, I find that seller financing and earnouts become more common as information asymmetry increases between the acquirer and the target. Financial statement audits...

We propose a security design model in which a potential acquirer approaches a firm with a value-add plan. The target has a single owner, who possesses private information: he knows whether his firm is compatible with the plan, or not. The seller agrees the acquirer will add value but not as much...

Automotive manufacturers are known to use deadline-based convex incentives to motivate dealerships to sell new cars. This paper shows that dealerships respond to these incentive targets by pushing customers from used to new cars as the end of the month approaches, and that subprime loans written...

When private firms are acquired, buyers commonly rely on seller financing and earnouts. Using a novel database of private acquisitions, I find that seller financing and earnouts become more common as information asymmetry increases between the acquirer and the target. Financial statement audits...

We study the impact of scarcity on intermediary profits through an analysis of the effects of the 2011 Japanese tsunami on the U.S. used car market. The tsunami devastated Japanese new car production for several months, which we show led to a demand surge for used cars. Wholesale and retail...

We study the relative importance of asset-backed lending (ABL) and cash flow-based lending (CFBL) in auto finance. We find that negative durability shocks generated by vehicle discontinuations lead to increased loan-to-value ratios and down payments. These results are consistent with an ABL+CFBL...