By Stylianos Papageorgiou | Posted on 4 August 2022

We characterize conditions under which the majority of voters supports a bailout despite incurring bailout expenditures. This yields inefficiently high investments when economic prospects are good. When economic prospects are...


By AJ Chen | Posted on 17 June 2022

We propose a novel pressure-based model of financial misconduct. We interpret the robust empirical findings of a high “success rate of crime” as evidence of skewness in the payoff of...


By ALI LAZRAK | Posted on 14 June 2022

We study a standard real-option problem in which sequential decisions are made through voting by a group of members with heterogeneous beliefs. We show that, when facing both investment and...


By Stylianos Papageorgiou | Posted on 10 June 2022

A collective and an individual investment in financial literacy, plus intrinsic skills, contribute to each household's financial literacy. We show that low- and high-skilled households oppose the collective investment, contrary...


By Kartik Anand | Posted on 22 November 2021

We examine why rational voters support risky “policy gambles”, even when detrimental to welfare, over maintaining a safe status quo. We present a model of electoral competition with two groups...


By Stylianos Papageorgiou | Posted on 8 November 2021

In a general equilibrium framework, we study the cost incurred by banks to ''buy" influence on capital regulation via campaign contributions. Our central result is that banks buy influence at...


By Shaoting Pi | Posted on 22 October 2021

We study firm governance when shareholders strategically vote and buy/sell shares. We find that voting for the better policy maximizes portfolio value only when pivotal; otherwise, it is better to...


By Max Miller | Posted on 21 September 2021

Risk premia are significantly elevated during periods of democratization in a cross-country panel of equity data covering 85 countries over 200 years, despite little evidence of a negative effect on...


By Laurent Bouton | Posted on 20 September 2021

This paper studies voting in shareholders meetings. We focus on the informational efficiency of different voting mechanisms, taking into account that they affect both management's incentives before the meeting and...


By Dirk Niepelt | Posted on 11 August 2021

We analyze the introduction of retail central bank digital currency (CBDC) into a two-tiered monetary system. Deposits, reserves, and CBDC differ in terms of operating costs and liquidity. We identify the optimal...