Working Papers

Managerial Labor Market Competition and Incentive Contracts
Job Market Paper, Nov 2018. [Paper]

This paper assesses the impact of managerial labor market competition on executive incentive contracts. I develop a dynamic contracting framework that embeds the moral hazard problem into an equilibrium search environment. The competition for executives increases total compensation and generates a new source of incentives, called labor market incentives, which substitutes for performance-based incentives (e.g. bonus, stocks, options, etc.). The model is estimated using a newly assembled dataset on executive turnovers from U.S. publicly listed firms. My structural estimates show that the model is capable of explaining and predicting the empirical puzzles that executives of larger firms experience higher compensation growth and receive higher performance-based incentives.

Marketmaking Middlemen
with Pieter Gautier and Makoto Watanabe, Oct 2018. [Paper][Slides]
  The best paper award, 20th EBES Conference Vienna
  Revised and Resubmitted at The RAND Journal of Economics

This paper develops a model in which market structure is determined endogenously by the choice of intermediation mode. There are two representative modes of intermediation that are widely used in real-life markets: one is a middleman mode where an intermediary holds inventories which he stocks from sellers for the purpose of reselling to buyers; the other is a market-making mode where an intermediary offers a platform for buyers and sellers to trade with each other. We show that a marketmaking middleman, who adopts the mixture of these two intermediation modes, can emerge in a directed search equilibrium and discuss the implications of this on the market structure. Our main insight survives with competing intermediaries.


I presented Marketmaking Middlemen in following conferences/seminars:
Symposium in Honor of Jean Tirole, Den Haag, Dec 2014; Search and Matching workshop, Bristol, Mar 2015; Search and Matching Annual Conference, Aix-en-Provence, May 2015 (poster); EARIE, Munich, July 2015; Search and Matching Annual Conference, Amsterdam, May 2016 (poster); EEA-ESEM, Geneva, August 2016.

I presented Managerial Labor Market Competition and Incentive Contracts in following conferences/seminars:
Search and Matching Annual Conference, Cambridge, May 2018 (poster); Belgian Financial Research Forum, Brussels, June 2018; Rotterdam Executive Conference, Rotterdam, June 2018; Queen Mary PhD Workshop, London, June 2018; 26th Finance Forum, Santander, July 2018; Finance Department Seminar, Vrije Universiteit, Amsterdam, October 2018; Economics Department Seminar, Vrije Universiteit, Amsterdam, October 2018; PhD Lunch Seminar, Erasmus University Rotterdam, October 2018.

Note: previous title Why Do Larger Firms Pay Executives More For Performance?