An issuer designs a contract and agents flexibly acquire information when deciding whether to accept it and provide liquidity. Unlike the existing literature, we do not impose any physical restriction on information structure to capture the idea of flexible information acquisition. Facing an...

We study a coordination game where players simultaneously acquire information prior to the play of the game. We allow general information acquisition technologies, modeled by a cost functional mapping from information structures. Costly local distinguishability is a property requiring that the...

We study optimal disclosure rules that alleviate inefficiencies caused by managerial private benefits. An entrepreneur raises capital from investors by designing a security and an associated covenant. The covenant allocates the control right of the project to the entrepreneur or investors in the...

Recent advances in IT and data science give firms more flexibility to process, store and communicate the growing volume and variety of performance data at a reduced and yet significant cost. In this paper, we study the impact of this cost and flexibility on employee monitoring and the internal...

This paper studies how disclosure of bank-specific information can mitigate systemic bank runs by reallocating systemic risk across different banks. We find that disclosure of information about vulnerability to systemic risk loads more of the constant aggregate systemic risk to less vulnerable...

We study information acquisition in a coordination game with incomplete information. To capture the idea that players can flexibly decide what information to acquire, we do not impose any physical restriction on feasible information structure. Facing an informational cost measured by reduction...

We study multi-agent security design in the presence of coordination frictions. A principal intends to develop a project whose value increases with an unknown state and the level of agents’ participation. To motivate the participation of ex-ante homogeneous agents, the principal offers them...

We study a dynamic contracting problem in which the principal can allocate his limited capacity between seeking evidence that confirms or that contradicts the agent's effort, as the basis for reward or punishment. Such flexibility calls for jointly designed monitoring and compensation schemes...

We study liquidity provision by dealers in a dynamic model of asset markets. When economic fundamentals are high (low), dealers provide more (less) liquidity by holding more (less) inventory, the market is liquid (illiquid), and interdealer trading is active (inactive). When fundamentals are...