Research

Finance

• Job Market Paper: Optimal Design of Limited Partnership Agreements , Working Paper.

Abstract: General partners (GP) are sometimes paid on a deal-by-deal basis and other times on a whole-portfolio basis. When is one method of payment better than the other? I show that when assets (projects or firms) are highly correlated or when GPs have low reputation, whole-portfolio contracting is superior to deal-by-deal contracting. In this case, by bundling payouts together, whole- portfolio contracting enhances incentives for GPs to exert effort. Therefore, it is better suited to alleviate the moral hazard problem which is stronger than the adverse selection problem in the case of high correlation of assets or low reputation of GPs. In contrast, for low correlation of assets or high reputation of GPs, information asymmetry concerns dominate and deal-by-deal contracts become optimal, as they can efficiently weed out bad projects one by one. These results shed light on recent empirical findings on the relationship between investors and venture capitalists.

• The Effects of Competition and Monitoring on R&D Investment: A Dynamic Approach (With Mark Schroder), Working Paper.

Presented at WFA 2019

• Parallel Running: Effects of Information Transmission by High Frequency Traders on Market Quality (With Ahmad Peivandi), Working Paper.

Presented at EGSC 2018

• Aggregate Risk, Bank Competition and Regulation in General Equilibrium (With Ahmad Peivandi and Ajay Subramanian), Working Paper.

• Holding Hands or Tying Hands? The Role of Syndication in Venture Capital Investment (With Zsuzsanna Fluck), Work in Progress. Contact me for an early draft.