Principal-Agent Problem

Optimal Rebate Design: Incentives, Competition and Efficiency in Auction Markets ArXiv ID: 2501.12591 “View on arXiv” Authors: Unknown Abstract This study explores the design of an efficient rebate policy in auction markets, focusing on a continuous-time setting with competition among market participants. In this model, a stock exchange collects transaction fees from auction investors executing block trades to buy or sell a risky asset, then redistributes these fees as rebates to competing market makers submitting limit orders. Market makers influence both the price at which the asset trades and their arrival intensity in the auction. We frame this problem as a principal-multi-agent problem and provide necessary and sufficient conditions to characterize the Nash equilibrium among market makers. The exchange’s optimization problem is formulated as a high-dimensional Hamilton-Jacobi-Bellman equation with Poisson jump processes, which is solved using a verification result. To numerically compute the optimal rebate and transaction fee policies, we apply the Deep BSDE method. Our results show that optimal transaction fees and rebate structures improve market efficiency by narrowing the spread between the auction clearing price and the asset’s fundamental value, while ensuring a minimal gain for both market makers indexed on the price of the asset on a coexisting limit order book. ...

The Future as History: The Prospects for Global Convergence in Corporate Governance and its Implications ArXiv ID: ssrn-142833 “View on arXiv” Authors: Unknown Abstract Comparative research has shown that, even at the level of the largest firms, corporate ownership structure tends to be highly concentrated, with dispersed owner Keywords: Corporate Governance, Ownership Structure, Shareholder Concentration, Principal-Agent Problem, Blockholders, Corporate Equity Complexity vs Empirical Score Math Complexity: 0.5/10 Empirical Rigor: 2.0/10 Quadrant: Philosophers Why: The paper is a qualitative review of corporate governance theories and comparative legal studies, lacking advanced mathematical formulas or statistical derivations. While it references empirical studies (e.g., La Porta et al.), it presents their findings descriptively without detailed data, backtests, or implementation-heavy analysis. flowchart TD A["Research Question<br>Prospects for Global Convergence<br>in Corporate Governance"] --> B["Methodology<br>Comparative Analysis of Ownership Structure"] B --> C["Data Input<br>Corporate Equity & Ownership<br>Structure of Largest Firms"] C --> D["Computational Process<br>Analysis of Shareholder<br>Concentration & Blockholders"] D --> E["Key Finding 1<br>Ownership is Highly Concentrated<br>Globally, not Dispersed"] D --> F["Key Finding 2<br>Principal-Agent Problem<br>persists differently across markets"] E --> G["Outcome<br>No Evidence of Global Convergence<br>Towards Dispersed Ownership Model"] F --> G