Publications

We develop a stylized model of efficient contracting in which firms compete for CEOs. The optimal contracts are designed to retain and insure CEOs...

According to classical economics, there are no gains to be made in an efficient market. Yet markets are often far from efficient and the gains are...

The aim of the bail-in proposal is that governments should have an alternative option to taxpayer-funded rescues of systemic banks. It operates...

We use a comparative approach to study the incentives provided by different types of compensation contracts, and their valuation by risk averse...

Using data from 1983 to 2010, we propose a new fear measure for Treasury markets, akin to the VIX for equities, labeled TIV. We show that TIV explains...

In many bilateral transactions, the seller fears being underpaid because its outside option is better known to the buyer. We rationalize a variety of...

Private equity sponsors pay special attention to designing capital structure, making buyouts an interesting setting for examining capital structure...

We use the recent introduction of biofuels to study the effect of industry factors on the relationships between wholesale commodity prices...

We propose that an active takeover market provides incentives by offering acquisition opportunities to successful managers. This allows firms to...

It is established that the standard principal-agent model cannot explain the structure of commonly used CEO compensation contracts if CRRA preferences...

We study a broad class of asset pricing models in which the stochastic discount factor (SDF) can be factorized into an observable component and a...

We develop an optimal dynamic contracting theory of overpay for jobs in which moral hazard is a key concern, such as investment banking. Overpaying...

An important recent theoretical literature argues that the threat of exit can represent an effective form of governance when the blockholder is a...

Open letter by the international Euro-nomics academic group (www.euro-nomics.com), composed of Markus Brunnermeier, Luis Garicano, Philip R. Lane...