Riccardo Calcagno's home page
Welcome to my private homepage (my official webpage).
I am Professor of Finance at Politecnico di Torino (Polytechnic University of Turin, Turin, Italy), in the Department of Management and Production Engineering (my full CV), and Research Fellow at Center for Research on Pensions and Welfare Policies at Collegio Carlo Alberto, Turin, Italy.
riccardo *dot* calcagno *at* polito *dot* it
riccalca *at* gmail *dot* com
Financial Literacy and financial education
Mergers and Acquisitions
Papers published in refereed journals:
(links to the paper are provided from the official journal webpage)
Entrepreneurs on their Financial Literacy: Evidence from the Netherlands with Yan Alperovych and Martijn Lentz (Forthcoming in Venture Capital)
It provides measures of self-assessed knowledge in various basic finance and accounting topics through a survey of Dutch entrepreneurs. This data allow us to determine whether entrepreneurs demand advice for problems they are less familiar with. We also test whether their financial knowledge is related to the economic performance of their firms.
Stock-Based Pay, Liquidity and the Role of Market Making, with Florian Heider , (2021), Journal of Economic Theory, 197, 1-27.
Shows that even an efficient stock price does not fully reflect the consequences of CEO shirking for the value of the firm. In order to restore incentives, the optimal contract gives the CEO high stock-based pay when, for example, the information of traders is less precise and when the stock is more liquid.
It presents a first step towards a structural estimation model determining the main unobservables in M&A negotiations: the intensity of potential competition, the preferences of the acquirer and the speed of learning about future, uncertain synergies.
To trust is good, but to control is better: How investors discipline financial advice, with Maela Giofré and Maria Cesira Urzi Brancati, (2017) Journal of Economic Behavior and Organization, 140, 287-316.
Do investors exert some form of control over the quality of the recommendations they receive, and, if so, which one? The paper shows that financial advice has the nature of a "credence service", for which investors with a low knowledge of financial issues control their advisors less. If they do so, they tend to ask for a second professional opinion.
Too busy to stay at work. How willing are Italian workers to "pay" to anticipate their retirement?, with Flavia Coda Moscarola and Elsa Fornero, (2017) Economics Bulletin, 3, 1694-1707.
It measures the reaction of Italian workers aged 55+ to the 2011 reform of the Italian pension system (the "Monti-Fornero" reform). Overall, individuals want to anticipate retirement but they are not ready to give up part of their future pension benefits in order to do so.
Financial literacy and the demand for financial advice, with Chiara Monticone, (2015) Journal of Banking and Finance, 50, 363-380.
Shows that non-independent, professional advisors have incentives to provide more information to more knowledgeable investors. Less financially literate investors instead are more likely to fully delegate their portfolio choice to advisors. The supply of professional advice is not a perfect substitute for individual financial literacy.
Potential competition in a takeover contest is modelled as a bargaining game with alternating offers. Every bidder can call an auction as an outside option at every stage. The model shows why the takeover premium resulting from a negotiated deal is not significantly different from that resulting from an auction, and why tender offers are rarely observed in reality.
Asynchronicity and coordination in common and opposing interest games, with Yuichiro Kamada, Stefano Lovo and Takuo Sugaya, (2014), Theoretical Economics, 9, 409-434.
Analyzes games with a pre-play phase during which players prepare the action that is implemented once the game officially opens. The technology during the pre-play phase is imperfect, since players cannot continuously revise their actions. It shows the equilibria in "common interest" games and in "opposing interest" games.
Measures the impact of financial literacy on the quota of housing investment in the portfolio of Italian households, using the Bank of Italy's SHIW over a 5-year panel.
Holding the expected return of the risky asset constant, do investors save more or less when the capital risk of investment opportunities increases? This paper analyzes the case where the representative consumer has a power utility and optimally decides her portfolio.
The Effect of House Prices on Household Consumption in Italy, with Elsa Fornero and Mariacristina Rossi, (2009), Journal of Real Estate Finance and Economics, 39, 284-300.
Do households consume more if they enjoy a capital gain in housing? The paper studies this effect on Italian households, using the Bank of Italy SHIW data. The results confirm a standard life-cycle model.
When a firm is financed with risky debt, the incentive contract that shareholders-principals offer their managers depends on the capital structure. The model illustrates that the relative degree of seniority of managers’ claims and creditors’ claims in case a bankruptcy procedure starts is crucial to determine the optimal incentive contract.
Discusses the result obtained by Magill and Quinzii (1999, 2002) according to which the stock market provides a constrained-efficient allocation in a general equilibrium model with moral hazard.
Bid-Ask Price Competition with Asymmetric Information between Market-Makers, with Stefano Lovo, (2006), Review of Economic Studies, 73, 329-355.
Considers a transparent quote-driven stock market in which market makers with different information compete for the uninformed order book. One market maker is an information monopolist. He is able to influence and possibly to mislead the beliefs of the uninformed competitors. This price leadership provides him with positive profits.
Current working papers and work in progress:
Financial Literacy, Human Capital, and Long-Run Economic Growth with Alberto Bucci, Simone Marsiglio, and Tiago Neves Sequeira (new draft coming soon!)
It studies the effects on the long-term growth of the investment in financial literacy when this increases the efficiency of the financial sector, through an increase in stock market participation, but it might crowd out the investment in human capital. With the use of a human-capital-based endogenous growth model (Lucas-Uzawa), we find that financial literacy may have a positive effect on growth if its impact on stock market participation is sufficiently strong.
Financial Literacy of MSMEs owners and access to credit, with Paolo Finaldi Russo, Ludovica Galotto, and Anita Quas (first draft coming soon!)
It investigates the impact of entrepreneurs' degree of financial literacy on their demand for bank loans, and the likelihood to obtain the loan demanded.