Selected Publications
Less Competition, More Meritocracy? (with Thomas Noe), Journal of Labor Economics, 2022, 40(3): 669-701
Shows that, when contestants are strategic, lax standards and exclusivity can make selection more meritocratic.
Meeting new peers: The effect of Morningstar category reassignment on fund flows and star ratings (with Martin Holmen and Taylan Mavruk), International Review of Financial Analysis, 2021, 77: 101842
Morningstar category reassignment positively affects the abnormal flows of high-rated funds and attenuates the flow-star rating relationship.
Money as a Weapon: Financing a Winner-take-all Competition (with Sanjay Banerji), Journal of Corporate Finance, 2021, 66: 101783
Studies optimal capital structure of a pioneering startup in a new market that faces potential entry of an established firm from an adjacent market. A pure-equity structure is optimal if the pioneer's first-mover advantage is small and/or the externality of the new market on the established firm's existing business is large. In the opposite cases, a high-leverage structure is optimal.
Turning Up the Heat: The Discouraging Effect of Competition in Contests (with Thomas Noe and Philipp Strack), Journal of Political Economy, 2020, 128(5): 1940-1975
When contestants are homogeneous and have convex effort costs, increasing contest competitiveness under three different notions (i.e., increased prize inequality, increased contest scale, and contestant entry), always discourages effort.
Dry Powder and Short Fuses: Private Equity Funds in Emerging Markets, Journal of Corporate Finance, 2019, 59: 48-71
Endogenizes investment level, managerial compensation, and lifespan of private equity funds in a simple model and predicts that emerging-market funds tend to have shorter lifespan than developed-market funds.
How tournament incentives affect asset markets: A comparison between winner-take-all tournaments and elimination contests (with Martin Holmen, Michael Kirchler, and Daniel Kleinlercher), Journal of Economic Dynamics and Control, 2017, 75: 1-27
Theoretically and empirically shows that tournament structure matters for investment strategies adopted by tournament-incentivized investment managers and asset prices.
Working Papers
Superstars: Talented or Merely Lucky? The Effect of Rank-Based Competition on Talent Attribution (with Thomas Noe)
For many standard statistical distributions of luck, no degree of competitiveness can ensure that "winners" are talented (not merely lucky). For others, e.g., Normally distributed noise, the probability that the best performer is talented increases very slowly with increased competition. In forecasting competitions with Normally distributed forecast errors, increased competition even reduces the probability that the most accurate forecaster is talented.
A theory of compensation, performance, and fundraising in the venture capital industry
Derives the optimal contract that resolves a general partner's moral hazard of diverting effort from one partnership to another in the venture capital industry.
Winning ways: How rank-based incentives shape risk-taking decisions (with Changxia Ke, Greg Kubitz, Yang Liu, Thomas Noe, and Lionel Page)
Examines how different contest structures affect contestants' risk-taking behavior. Shows, both theoretically and experimentally, that participants choose positively skewed performance under highly convex prize schedules and negatively skewed performance under concave ones. Convexifying the prize schedule or increasing competition for identical winner prizes induces riskier and more skewed performance.