Shiyang Huang
    PhD Candidate
    Department of Finance
    London School of Economics
    Room 418, Financial Market Group, 4th Floor Lib
    Houghton Street
    London WC2A 2AE
    Email: s.huang5@lse.ac.uk
    Phone: +44 (0)20 7849 4647


    [Curriculum Vitae]


Job Market Paper

Delegated Information Acquisition and Asset Pricing ,October 2014

This paper studies how compensation contracts, which are designed to minimize delegation or agency problem arising with institutional investors, affect the information acquisition decision and asset pricing in financial markets. Principals (e.g. fund owners) delegate and incentivize their agents (e.g. fund managers/in-house analysts) to make (unobservable) efforts in acquiring information by compensation contracts, which are general functions of agents' forecasts, asset's price and payoff. Complementarity among the principals' delegation decisions arises, as a result: when more principles delegate their agents to acquire information, the asset price becomes more informative and it would be easier for principals to monitor agents through asset price; with agency problem mitigated, other principals would be more willing to delegate their agents to acquire information. This is novelty to previous studies which only documented substitute effect, i.e. investors' incentive to acquire information declines as asset price becomes more informative due to lower marginal benefit. This study shows that this agency problem can provides new explanations to several widely discussed phenomena, including idiosyncratic volatility comovement among different assets, excess volatility associated with smaller/growth stocks or during recessions, institutional investors' herding behavior and home bias.


Working Papers

Investment Waves under Cross Learning (with Yao Zeng from Harvard University), September 2014


How Options Affect Information Acquisition and Asset Pricing , October 2014


The Booms and Busts of Beta Arbitrage (with Dong Lou and Christopher Polk from LSE), October 2014


Does Word of Mouth Communication Affect Trading? , October 2014


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