A paper co-authored by Berkeley Haas Prof. Nicolae Gârleanu has been awarded the prestigious Stephen A. Ross Prize in Financial Economics.
The award, which includes a $50,000 prize, is given biennially to recognize a paper published in the past 15 years that made significant contributions to the field of financial economics. It was established by the Foundation for Advancement of Research in Financial Economics (FARFE) in 2008.
Gârleanu’s winning paper, Over-the-Counter Markets, was co-written by Darrell Duffie of Stanford University and Lasse Pedersen of Copenhagen Business School, and published in the journal Econometrica in 2005. Over-the-counter trading is an important and often dominant mode of trading in many markets. In contrast to centralized markets, traders in over-the-counter markets must search for counterparties and bargain over the terms of trade.
“The paper and subsequent literature have transformed our understanding of liquidity and price determination in over-the-counter markets in which many financial assets are traded,” according to the prize announcement.
“This is a very illustrious prize, and it’s a big honor for Nicolae and for Haas,” said Prof. Catherine Wolfram, Associate Dean for Academic Affairs and Chair of the Faculty. “The previous winners include Nobel Laureates, and the first winner was Berkeley Haas Emeritus Professor Hayne Leland.”
“I feel deeply honored for our paper to receive this prize,” Gârleanu said. “The quality of the previous winners, the composition of the prize committee, and of course the memory of Steve Ross—one of the fathers of modern financial economics theory and a true giant in the field—make it a very special award.”