The financial industry has recently seen a push away from structured products and towards transparency. The trend is to decompose products, such that customers understand each component as well as its price. Yet the enormous annuity market combining investment and longevity has been almost untouched by this development. We suggest a simple decomposed annuity structure that enables cost transpar...

Increasing quality transparency is widely regarded as a strong mechanism for improving the alignment between patient choices and provider capabilities, and thus, is widely pursued by policymakers as an option for improving the healthcare system. We study the effect of increasing quality transparency on patient choices, hospital investments, societal outcomes (e.g., patients’ social welfare and ...

Information about a new or non-frequently purchased product is often produced by both sides of the market. We construct a monopoly pricing model consisting of both seller’s information disclosure and consumer’s information acquisition. The presence of consumer search, which lowers the probability of making sales, creates incentive for the monopolist to deter search. In contrast with most previo...

Most market observers attribute the recent credit crunch to a confluence of factors: excess leverage, opacity, improperly estimated correlation between bundled assets, lax screening by mortgage originators, and market-distorting regulations. It was the job of the credit rating agencies to create transparency, to provide the basis for risk-management regulation, and to discipline mortgage lender...

We provide a tractable model of counterparty risk in an intermediated risk transfer market, and analyze the consequences of this risk being private information. We show that unknown type information can be revealed when large trades are observable; however, the allocation is shown to be constrained inefficient. The inefficiency is highlighted by considering the imposition of a transaction tax, ...

While transparency in financial markets should enhance liquidity, its exploitation by unethical and parasitic traders discourages others from fully embracing disclosure of their own information. Traders exploit both the private information in upstairs markets used to trade large orders outside traditional exchanges and the public information present in exchanges’ quoted limit order books. Using...

Simulations and games are widely accepted as a powerful mode of teaching and learning. This is especially so in the field of finance in teaching students the intricacies of stock market trading. Stock market simulations complement more traditional methods of teaching finance by encouraging learning by doing, by generating motivation and enjoyment, and by engaging the business student in a simul...

The phenomenon of the financial crisis is not a new phenomenon around the world. The structure of an economy or a set of economies may face a financial crisis. In fact, it is deformation, dimensions, causes and roots of the financial crisis which create a state of change from this crisis. Recently, evidence has shown that the market value of firms subject to bankruptcy is significantly reduced....