Upcoming Webinars

The Earnings Game

Alessio Piccolo and Michele Bisceglia

November 6, 2025
Seminar: 12:00 pm - 1:00 pm ET
Virtual Coffee Break: 1:00 pm - 1:30 pm ET

Presented by Alessio Piccolo

Abstract: We study how the two-way interaction between corporate strategies and market valuations affects the design of managerial incentives. We describe how contracts motivate managers to focus on the metrics of performance that are more valuable to firms, and how incentives that seek this objective may appear to an observer who ignores the feedback to investors' valuations. Low-powered incentives can be optimal when the most valuable metrics induce less volatile valuations. The managers' ability to influence market valuations makes the observed price-pay sensitivity a poor proxy for the quality of incentives.

The Quiet Hand of Regulation: Harnessing Uncertainty and Disagreement

Daniel Andrei and Lorenzo Garlappi

December 4, 2025
Seminar: 12:00 pm - 1:00 pm ET
Virtual Coffee Break: 1:00 pm - 1:30 pm ET

Abstract: Regulating externalities is a major challenge when economic agents face uncertainty and disagreement. Traditional Pigouvian and Coasean approaches often struggle because they require either precise knowledge of externality costs or frictionless bargaining. We propose an “uncertainty-based regulation” (UBR) mechanism that leverages both uncertainty and firms’ heterogeneous information to achieve socially efficient outcomes without requiring disclosure of private information. UBR works by creating a fictitious market where firms’ incentives are aligned with social objectives through a simple, state- contingent transfer rule. This framework provides a Coasean solution that internalizes the externality. We show that the equilibrium allocation induced by UBR is team efficient, dominates traditional regulatory tools, incentivizes information acquisition, and remains robust even when firms distrust each other’s private information. Moreover, if brought to a vote, it would receive unanimous support, making it politically viable.