• Equilibrium Theory of Financial Markets: Recent Developments (with J. H. Yoon), prepared for The Journal of Economic Literature. PDF

Decentralized-Market Design

  • Decentralized Exchange (with S. Malamud), The American Economic Review 107, 11 (2017). PDF
    This paper develops an equilibrium model of decentralized trading that accommodates any networked markets with coexisting exchanges represented by hypergraphs. We identify economic effects that do not have centralized-market counterparts. Decentralized trading can improve allocation of risk among traders relative to centralized trading.
  • Design of Synthetic Financial Products in Decentralized Markets (with J. H. Yoon). PDF
  • Innovation in Decentralized Markets: Synthetic Products vs. Trading Technology (with J. H. Yoon). PDF
  • Exchange Design and Efficiency (with J. H. Yoon), Econometrica 89, 6 (2021). PDF
  • Improving Access to Information Through Market Design (with X. Wu). PDF
  • Design of Market-Clearing Technology (with C. Lyu and J. H. Yoon).
  • Bilateral Market Power in Fragmented Markets (with S. Malamud).

Interactions among Groups/Equilibrium and Stability/Games in Contracts

  • Matching with Multilateral Contracts (with N. Yoder). PDF
  • Matching with Complementary Contracts (with N. Yoder), PDF, Econometrica 88, 5 (2020, lead article).
  • Games in Contracts: Formal and Informal Institutions (with R. Dix and J. H. Yoon).
  • Complementarity in Matching, Games, and Exchange Economies (with N. Yoder), R&R at Journal of Economic Theory. PDF

Theory and Design of Imperfectly Competitive Markets/Divisible Good Markets/Centralized Markets

  • Price Inference in Small Markets (with M. Weretka), Econometrica 80, 2 (2012). PDF
    The literature on information aggregation suggests that larger markets unambiguously improve price inference. These results have been developed for markets where the values of all traders for the exchanged good are determined by a fundamental (common) shock. Heterogeneity in (income, endowment, liquidity, or preference) shocks underlying trader values changes the predictions of the classical model: Price informativeness can be higher in smaller markets.
  • Demand Reduction and Inefficiency in Multi-Unit Auctions (with with L. Ausubel, P. Cramton, M. Pycia, and M. Weretka), The Review of Economic Studies 81, 4 (2014). PDF
    Auctions often involve the sale of multiple units of goods or assets; Treasury, emission permits, electricity, repo and spectrum are examples. We examine (in)efficiency and revenue for the commonly used multi-unit auction formats. We explain the new incentives through multi-unit features, not present in auctions with unit demands, such as multi-unit but constant marginal utility and diminishing marginal utility.
  • Dynamic Thin Markets (with M. Weretka), The Review of Financial Studies, 28, 10 (2015). PDF
    Many markets, including financial, are thin in that trade is dominated by a group of large agents who have price impact. The assumption of price-taking behavior underlies many central results in asset pricing. This paper provides an equilibrium model with illiquidity that arises from price impact. Dynamic bilateral price impact changes both the efficiency and arbitrage properties of equilibrium in ways not anticipated either by static models with bilateral price impact or dynamic models with one-sided market power.
  • Information and Strategic Behavior (with M. Weretka), The Journal of Economic Theory 158 (2015). PDF
    Does encouraging trader participation enhance market competitiveness? When trader preferences are interdependent, for natural information structures, larger markets may be less efficient, less liquid and be characterized by lower per capita welfare.
  • Privacy in Markets (with M. Ollar and J. H. Yoon). PDF
    This paper builds a dynamic model of imperfectly competitive markets (double auction/multilateral oligopoly) with learning. The model allows analysis of how transparency and, more generally, the design of demand conditioning on statistics of current and past behavior affects equilibrium trading and efficiency.
  • Dynamic Imperfectly Competitive Markets: A Non-Recursive Approach (with J. H. Yoon). PDF
  • Dynamic Imperfectly Competitive Markets with Heterogeneous Traders (with J. H. Yoon).
  • Supply Function Games with General Gaussian Information Structures (with J. H. Yoon), available by e-mail.
  • Core Selection in Auctions and Exchanges (with N. Yoder). PDF

Optimization and Games in Spans: Applications to Financial Innovation, Information Disclosure, and Bundling Many economic problems involve sellers choosing collections of ''bundles'' in order to maximize the bundles' market value. Instances of optimization over bundles include issuance of asset-backed securities by real asset holders, choosing a portfolio of risky assets to offer by central banks and Treasury Departments, and selection of product variety by multiproduct sellers with a bundle interpreted as a product with multiple continuous characteristics or attributes. To study these economic problems, the following introduce and analyze a class of single-agent problems and games in which strategies are spans.

  • Competition in Financial Innovation (with A. Carvajal and M. Weretka), Econometrica 80, 5 (2012). PDF
    A paper on endogenous (in)completeness of market structures. When does competition in financial innovation among asset owners provide sufficient incentives to create and complete markets? In economies with convex marginal utility, any financial structure with an incomplete set of securities brings higher market value of the assets than a complete financial structure, even if innovation is costless. Thus, if market efficiency is to be improved through asset innovation, incentives other than maximization of asset value are necessary. This paper introduces games over spans, which can be useful in modeling competition beyond the financial application.
  • Information Design and Capital Formation (with A. Carvajal and G. Sublet), The Journal of Economic Theory 176 (2018). PDF
    This paper examines the recent change in the regulatory framework of small business financing − the first major change in securities legislation in eight decades, which weakens disclosure requirements for small companies seeking financing. The critics of the controversial JOBS Act, which, in particular, makes room for financing though private market (crowdfunding), have warned about the possibility of a reduction in the investors' willingness to invest and, hence, the capital raised by firms. As this research demonstrates, the risk sharing motive for trading itself implies that the new legislation is indeed consistent with its intended objectives of capital formation and efficiency.

Qualitative Decision Making

  • Quantile Maximization in Decision Theory, The Review of Economic Studies 77 (2010). PDF
    This paper introduces a model of preferences in which an individual compares uncertain alternatives through a quantile of the induced utility distributions. The choice rule of Quantile Maximization nests maxmin and maxmax but also captures less extreme scenario-based or order-statistics analysis. Quantile Maximization, unlike Expected Utility or any cardinal model, can provide a decision theory for environments in which the alternatives involve categorical variables (e.g., quality ratings, professions, grades); as well as a more general way of expressing a preference for robustness to own utility's assessments. It can also be used in policy implementation for populations with heterogeneous preferences in which a decision maker's only knowledge about preferences is that people prefer more to less.


  • Price Discrimination and Resale (with A. Basuchoudhary, C. Metcalf, K. Pommerenke, D. H. Reiley, C. Rojas, and J. Stodder), The Journal of Economic Education (2008), 39 (3).
  • Thin Markets (with M. Weretka), The New Palgrave Dictionary of Economics Online (2008), Steven N. Durlauf and Lawrence E. Blume, Eds. Palgrave Macmillan.