Luohan Academy

Event Recap

Intermediated Asymmetric Information, Compensation, and Career Prospects

Speakers : Ron Kaniel


Ron Kaniel (Rochester)

Ron Kaniel is the Jay S. and Jeanne P. Benet Professor of Finance at the Simon School of Business, University of Rochester. He has research interests in the areas of asset pricing, financial intermediation and investments. His research is focused on understanding mutual funds investment decisions and how they impact security prices, the impact of endogenous community effects on investors’ investment decisions and equilibrium prices, and the predictive role of changes in trading volume and investors’ order flow on security returns.

Topic:  Intermediated Asymmetric Information, Compensation, and Career Prospects

Abstract: Adverse selection harms workers, but benefits firms able to identify talent. An informed intermediary expropriates its agents' ability by threatening to fire and expose them to undervaluation of their skill. Agents' track record gradually reduces the intermediary's information advantage. We show that in response, the intermediary starts churning well-performing agents she knows to be less skilled. Despite leading to an accelerated reduction in information advantage, such selectivity boosts profits as retained agents accept below-reservation wages to build a reputation faster. Agents prefer starting their careers working for an intermediary, as benefits from building reputation faster more than offsets expropriation costs. We derive implications of this mechanism for pay-for performance sensitivity, bonuses, and turnover. Our analysis applies to professions where talent is essential, and performance is publicly observable, such as asset management, legal partnerships, and accounting firms.


Sept 13, 2021, Monday

Eastern Daylight Time:  10-11:30am

China Standard Time: 10-11:30pm

Central European Summer Time:  4-5:30pm

Join Zoom Webinar:

Meeting ID: 841 6416 0669

Passcode: 543708

Meeting instructions:

-  The webinar will take place via Zoom, it will last for 90 minutes.

-  Please mute your microphone during the talk, this permits better sound quality by our speakers.

-  You are encouraged to ask questions or provide comments during the seminar.   

Forthcoming webinars by:

Professor Liyan Yang (Toronto), Sep 23

Professor Zheng Song (CUHK), Oct 19

Professor Darrell Duffie (Stanford), Nov 9

Professor Catherine Tucker (MIT), TBD

Professor Patrick Bolton (Columbia), TBD

Luohan Webinar is a regular event of the Academy purported to provide a platform for world-class scholars to present their frontier research and exchange views on digital technology and digital economy, among other related themes. We believe that truth can only be uncovered through open and critical discussions.

Past Luohan Webinar:

Aug 31, 2021, Yao Zeng (Wharton) on “FinTech Lending and Cashless Payments”

Aug 10, 2021, Shang-Jin Wei (Columbia) on “FinTech as a Financial Liberator”

Aug 3, 2021, Thomas Philippon (NYU) on “Data Sharing and Market Power with Two-sided Platforms”

July 13, 2021, David Autor (MIT) on “New Frontiers: The Origins and Content of Work, 1940-2018”

Jun 15, 2021, Erik Brynjolfsson (Stanford) on “Digital Capital and Superstar Firms”

May 20, 2021, Wensheng Peng (CICC) on “Some thoughts on the Economic Impact of Digital Transformation”

         Apr. 13, 2021, Ruixue Jia (UCSD) on “Entrepreneurial Reluctance: Talent and Firm Creation in China”

         Mar 25, 2021, Francesco D’Acunto (Boston College) on “Fintech and Consumer Finance” 

         Mar 15, 2021, Yangqing Jia (Alibaba) on “Artificial Intelligence: Past, Present and Future”

Feb 23, 2021,  Wei Xiong (Princeton) on “A Model of Cryptocurrencies”

Feb 1, 2021,   Brian Fath (IIASA & Towson), Roger Koppl (Syracuse), Roberto Cazzola Gatti (KLI & Tomsk State University) on “The Nature of Economic Emergence: Discovering your Niche in the Platform Ecology”

Jan 26, 2021,  Haoxiang Zhu (MIT) on “On Interest-Bearing Central Bank Digital Currency in the United States”

Jan 12, 2021,  Pan Jun (SAIF, SJTU) on “Fintech Adoption and Household Risk-Taking”

Dec 15, 2020,  Zhiguo He (Chicago) on “Open Banking: Credit Market Competition When Borrowers Own the Data”

Dec 7, 2020,  Raghavendra Rau (Cambridge) on “Law, Trust, and the Development of Crowdfunding”

 Dec 4, 2020,  Robert Townsend (MIT) on “Optimized Payment and Financial Infrastructure under Distributed Ledgers and Cryptography”

Nov 9, 2020,  Neng Wang (Columbia) on “Implications of Stochastic Transmission Rates for Managing Pandemic Risks”

Oct 27, 2020,  Sir Chris Pissarides (LSE) on “Productive Robots and Industrial Employment”

Oct 19, 2020,  Xavier Vives (IESE), Elena Carletti (Bocconi), Stijn Claessens (BIS), Antonio Fatas (INSEAD) on “The Bank Business Model in the Post-Covid 19 World”

Sep 22, 2020, Xavier Vives (IESE) on “Digital Disruption in Banking”

Sep 8, 2020, Soumitra Dutta (Cornell), “Measuring Digital Economy”

Aug 31, 2020, Lin William Cong (Cornell),  “Economic Data Science”

Jul 15, 2020, Alberto G. Rossi (Georgetown), “Robo-advisors for Investment, Consumption and Savings Decisions”

Jun 18, 2020. Victor Couture (UC Berkeley), “Measuring real-time movement and social contact with smartphone data”

Jun 5, 2020, Michael Weber (Chicago), “The Cost of the Covid-19 Crisis”


If you would like to give a presentation in a future webinar, please contact our Economist Dr. Xijie Gao ( ​

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