Agency explanations of the venture capital process routinely assume that entrepreneurs and venture capitalists have time-consistent (“TC”) preferences, and thus perfect self-control. Given the growing evidence on self-control problems, from both experiments and field studies, it is natural...

This article shows that the behavior of perfectly rational financial actors can cause financial meltdowns like the ones that occurred in 2007 and 2008. It analyzes the nature of informational asymmetries and group pathologies common in financial transactions and the role of intermediaries and...

My article, “Corporate Actors, Corporate Crimes and Time-Inconsistent Preferences” was part of a symposium in the Virginia Journal of Criminal Law. This is a Response to the Comments to that article: Miriam Baer, “Temporal Inconsistency and the Regulation of Corporate Misconduct”; Adam...

The paper studies bargaining games involving players with present-biased preferences. The paper shows that the relative timing of bargaining rewards and bargaining costs will determine whether the players’ present-bias will affect bargaining outcomes. In cases where players agree to a bargain...

In theory, large institutional investors are in an excellent position to overcome collective action problems and form voting coalitions to actively monitor and discipline managers of public corporations. This article argues that it is highly unlikely that voting coalitions of institutional...

This article models the long-term relationship between managers and shareholders as a multi-stage (repeated) bargaining game. In each stage of the game, the parties reach explicit and tacit bargains to divide two types of stakes: “substantive” or monetary stakes, such as dividends, retained...

Existing incomplete contracting models assume that contracting parties have perfect self-control. This Article approaches the incomplete contracting problem from a new perspective, one that brings to the foreground the potential self-control problems faced by contracting parties. In particular,...

This article develops a behavioral theory of inchoate offenses - criminal attempt, conspiracy, and solicitation. The theory helps explain why inchoate crimes exist and why they are punished less severely than the underlying offense. The article identifies an important aspect of criminal...

Financial systems are shaped by conscious design and market forces. The Dodd-Frank Act is, at least in part, a collection of mechanisms to supplement and better channel market incentives. It expands the scope of financial regulation and requires regulators to engage in a full-scale...

This article develops a new theory of interconnected financial contracts. It focuses on a common type of interconnected contracting scenario, in which party A enters into a contract with B, and B enters into a separate contract with C. While A and C are not in privity of contract, their common...