Assistant Professor of Finance



Curriculum Vitae

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Ph.D., Economics, Northwestern University, 2019
M.A., Economics, Northwestern University, 2019
M.A., Economics, University of Chile, 2013
B.S., Industrial Engineering, University of Chile, 2013.

Fields of Specialization

Corporate Finance, Information Economics, Banking, Financial Contracting

Job Market Paper

Persuading Multiple Audiences: An Information Design Approach to Banking Regulation

A policy maker concerned with the potential default of a bank sequentially conducts an asset quality review and a stress test under the scrutiny of multiple types of market participants (audiences). Surprisingly, the optimal comprehensive assessment (asset quality review and stress test) is opaque when the bank has high-quality assets, and transparent when the bank has poor-quality assets. The optimal policy also imposes contingent recapitalizations. Without them, disclosure of information may backfire and the bank may fare worse than under laissez faire. To deal with sudden liquidity shocks the policy maker optimally designs a persuasion mechanism that resembles an emergency lending facility, which (a) provides funds to banks in exchange for assets, and (b) discloses information about the bank’s liquidity. Interestingly, imposing capital requirements hurts the effectiveness of emergency lending. Optimal interventions display a non-monotone pecking order: the private sector funds banks with either high or poor-quality assets, while institutions with intermediate-quality assets participate in the government’s emergency lending program. My results shed light on the role information disclosure as a regulatory tool in environments with multiple audiences and multi-dimensional fundamentals.

Other Research Papers

Persuasion in Global Games with Application to Stress Testing NEW VERSION
(joint with A. Pavan) (Slides) (Supplement
R&R American Economic Review

We study robust/adversarial information design in global games of regime change. We show that the optimal policy coordinates all market participants on the same course of action. Importantly, while it removes any “strategic uncertainty,” it preserves heterogeneity in “structural uncertainty”. When the designer is constrained to public disclosures, we identify conditions under which the optimal policy is a “pass/fail” test, as well as conditions under which the test is monotone in the banks’ fundamentals. Finally, we show that the benefits from discriminatory disclosures come from “dividing-and-conquering” the market, and relate them to the type of securities issued by the banks.

Under Pressure: Optimal Security Design with Liquidity-Constrained Sellers (joint with  N. Figueroa) working paper

A firm under distress is forced to sell assets to improve its liquidity position.  The firm maximizes revenue and fully discounts future payoffs associated with the underlying assets. When buyers’ private signals are informative in the strong order, the only type of contracts the seller offers are debt contracts with face values monotonically ordered in buyers’ types. Furthermore, the optimal auction of securities satisfies the same qualitative properties found in standard auction design. Namely, the optimal allocation rule features (i) no distortion at the top; (ii) binding downward, local incentive constraints; and (iii) no rents at the bottom. We then ask whether the seller benefits from disclosing information to potential buyers. When asymmetric information of the latter represents different levels of optimism regarding the future asset’s payoffs and not a technological advantage over other bidders, the seller commits to a full-disclosure policy