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Paul Pfleiderer
Paul Pfleiderer
Professor, Finance
Contact Info
+1 (650) 723-4495
Email
PaulPfleiderer
The C.O.G. Miller Distinguished Professor of Finance
Academic Area: 
Finance

Research Statement

Paul Pfleiderer’s early research was primarily focused on issues arising in financial markets when traders are asymmetrically informed. In pursuing that research he developed theoretical models that analyze how information is incorporated in prices through trading and how information flows determine trading volume. He also analyzed how information is sold to investors when the value of the information is reduced the more widely it is disseminated. In other research he studied problems involved in measuring active funds’ performance, contracting concerns in venture financing, and policy issues related to disclosure requirements. His most recent research addresses issues in corporate governance and the regulation of banks and other financial institutions.

Research Interests

  • Market microstructure
  • Asset allocation
  • Corporate governance
  • Regulation of financial institutions

Bio

Paul Pfleiderer received BA, MPhil, and PhD degrees from Yale University, all in the field of economics. He has been teaching at Stanford since 1981. His research, much of which has been jointly pursued with Anat Admati, another professor of finance at the GSB, is generally concerned with issues that arise when agents acting in financial markets are differentially informed. His current research concerns corporate governance. In addition to his academic research, Professor Pfleiderer has consulted for various corporations and banks and has been involved in developing risk models and optimization software for use by portfolio managers.

Academic Degrees

  • PhD in Economics, Yale University, 1982
  • MPhil in Economics, Yale University, 1979
  • BA, Yale University, 1976

Academic Appointments

  • At Stanford University since 1981.

Publications

Journal Articles

The Leverage Ratchet Effect
Anat R. Admati, Peter M. DeMarzo, Martin F. Hellwig, Paul Pfleiderer. The Journal of Finance. February 2018, Vol. 73, Issue 1, Pages 145-198.
Alpha Signals, Smart Betas, and Factor Model Alignment
Terry Marsh, Paul Pfleiderer. The Journal Portfolio of Management. 2016, Vol. 42, Issue 5, Pages 51-66.
Liability Holding Companies
Anat R. Admati, Peter Conti-Brown, Paul Pfleiderer. UCLA Law Review. 2012, Vol. 59, Issue 4, Pages 853-913.
The Wall Street Walk and Shareholder Activism: Exit as a Form of Voice
Anat R. Admati, Paul Pfleiderer. Review of Financial Studies. 2009, Vol. 22, Pages 2245-2285.
Broadcasting Opinions with an Overconfident Sender
Anat R. Admati, Paul Pfleiderer. International Economic Review. 2004, Vol. 45, Issue 2, Pages 467-498.
Forcing Firms to Talk: Financial Disclosure Regulation and Externalities
Anat R. Admati, Paul Pfleiderer. Review of Financial Studies. 2000, Vol. 13, Issue 3, Pages 479-519.
Does It All Add Up? Benchmarks and the Compensation of Active Portfolio Managers
Anat R. Admati, Paul Pfleiderer. The Journal of Business. 1997, Vol. 70, Issue 3, Pages 323-350.
Large Shareholder Activism, Risk Sharing, and Financial Market Equilibrium
Anat R. Admati, Paul Pfleiderer, Josef Zechner. Journal of Political Economy. 1994, Vol. 102, Issue 6, Pages 1097-1130.
Robust Financial Contracting and the Role of Venture Capitalists
Anat R. Admati, Paul Pfleiderer. Journal of Finance. 1994, Vol. 49, Issue 2, Pages 371–402.
Trading on Information in Financial Markets
Anat R. Admati, Paul Pfleiderer. The New Palgrave Dictionary of Money and Finance. Palgrave Macmillan, 1993.
Trading Volume
Anat R. Admati, Paul Pfleiderer. The New Palgrave Dictionary of Money and Finance. Palgrave Macmillan, 1993.
Sunshine Trading and Financial Market Equilibrium
Anat R. Admati, Paul Pfleiderer. Review of Financial Studies. 1991, Vol. 4, Issue 3, Pages 443-481.
Direct and Indirect Sale of Information
Anat R. Admati, Paul Pfleiderer. Econometrica. 1990, Vol. 58, Issue 4, Pages 901-928.
Divide and Conquer: A Theory of Intraday and Day-of-the-Week Mean Effects
Anat R. Admati, Paul Pfleiderer. Review of Financial Studies. 1989, Vol. 2, Pages 189–223.
A Theory of Intraday Patterns: Volume and Price Variability
Anat R. Admati, Paul Pfleiderer. Review of Financial Studies. 1988, Vol. 1, Issue 1, Pages 3-40.
Selling and Trading on Information in Financial Markets
Anat R. Admati, Paul Pfleiderer. American Economic Review. 1988, Vol. 78, Issue 2, Papers and Proceedings of the One-Hundredth Annual Meeting of the American Economic Association, Pages 96–103.
Viable Allocations of Information in Financial Markets
Anat R. Admati, Paul Pfleiderer. Journal of Economic Theory. 1987, Vol. 43, Issue 1, Pages 76-115.
A Monopolistic Market for Information
Anat R. Admati, Paul Pfleiderer. Journal of Economic Theory. 1986, Vol. 39, Issue 2, Pages 400–438.
On Timing and Selectivity
Anat R. Admati, Sudipto Bhattacharya, Paul Pfleiderer, Stephen A. Ross. Journal of Finance. 1986, Vol. 41, Issue 3, Pages 715-730.
Interpreting the Factor Risk Premia in the Arbitrage Pricing Theory
Anat R. Admati, Paul Pfleiderer. Journal of Economic Theory. 1985, Vol. 35, Issue 1, Pages 191–195.

Book Chapters

Fallacies and Irrelevant Facts in the Debate on Capital Regulation
Anat R. Admati, Peter M. DeMarzo, Martin Hellwig, Paul Pfleiderer. Central Banks at a Crossroads: Europe and Beyond. London: Anthem Press, 2014, Pages 33-50.

Working Papers

Chameleons: The Misuse of Theoretical Models in Finance and Economics | PDF
Paul Pfleiderer, August 2018
The Leverage Ratchet Effect | PDF
Anat R. Admati, Peter M. DeMarzo, Martin F. Hellwig, Paul Pfleiderer, November 2017
Increased-Liability Equity: A Proposal to Improve Capital Regulation of Large Financial Institutions | PDF
Anat R. Admati, Paul Pfleiderer, March 12010
The "Wall Street Walk" and Shareholder Activism: Exit as a Form of Voice | PDF
Anat R. Admati, Paul Pfleiderer2007
Noisytalk.com: Broadcasting Opinions in a Noisy Environment | PDF
Anat R. Admati, Paul Pfleiderer2000
Does It All Add Up? Benchmarks and the Compensation of Active Portfolio Managers
Anat R. Admati, Paul Pfleiderer1996
Robust Financial Contracting and the Role of Venture Capitalists
Anat R. Admati, Paul Pfleiderer1994
Large Shareholder Activism, Risk Sharing, and Financial Market Equilibrium
Anat R. Admati, Paul Pfleiderer, Josef Zechner1992
Underestimation of Portfolio Insurance and the Crash of October 1987
Paul Pfleiderer, , Charles Jacklin1991
Sunshine Trading and Financial Market Equilibrium
Anat R. Admati, Paul Pfleiderer1990
Divide and Conquer: A Theory of Intraday and Day-of-the-Week Mean Effects
Anat R. Admati, Paul Pfleiderer1989
Selling and Trading on Information in Financial Markets
Anat R. Admati, Paul Pfleiderer1987
Direct and Indirect Sale of Information
Anat R. Admati, Paul Pfleiderer1986
On Timing and Selectivity
Anat R. Admati, Paul Pfleiderer, Stephen Ross, Sudipto Bhattachary1986
Viable Allocations of Information in Financial Markets
Anat R. Admati, Paul Pfleiderer, William F. Sharpe1986
A Monopolistic Market for Information
Anat R. Admati, Paul Pfleiderer1985
The Value of Information in Speculative Trading | PDF
Anat R. Admati, Paul Pfleiderer1984
A Note on Performance Evaluation | PDF
Paul Pfleiderer, Sudipto Bhattacharya1983
Delegated Portfolio Management
Paul Pfleiderer, Sudipto Bhattacharya1983

Teaching

Degree Courses

2019-20

FINANCE 201: Finance

This course covers the foundations of finance with an emphasis on applications that are vital for corporate managers. We will discuss many of the major financial decisions made by corporate managers, both within the firm and in their interactions...

2018-19

FINANCE 319: Private Equity Investing Seminar

See FINANCE 321 course description.

FINANCE 321: Investment Management and Entrepreneurial Finance

The Investments courses comprise an intensive overview of active fundamental investing in both the public and private equity markets. They are relevant for students interested in venture capital, growth equity, private equity, hedge funds, mutual...

FINANCE 329: Investment Seminar

See FINANCE 321 course description.

Executive Education & Other Non-Degree Programs

Other Teaching

Stanford Case Studies

IFC and Emerging Market Private Equity | F288
William Meehan III, Paul Pfleiderer, Michael Kennedy, Debra McCoy2013
Leopard Capital, Private Equity in Cambodia | F279
Michael Kennedy, Debra McCoy, William Meehan III, Sheila Melvin, Paul Pfleiderer2013
Managing for Value at the Global Environment Fund | F285
Michael Kennedy, Debra McCoy, William Meehan III, Paul Pfleiderer2013
Zephyr Peacock India: Perfectly Diligent | F283
William Meehan, Paul Pfleiderer, Sheila Melvin, Debra McCoy2013
Asia Alternatives, Approaching the Frontier | F278
William Meehan III, Paul Pfleiderer, Michael Kennedy, Debra McCoy, Sheila Melvin2012
Standard Chartered Private Equity Africa, Value at the Frontier | F280
William Meehan III, Paul Pfleiderer, Michael Kennedy, Debra McCoy2012
A Note on the Involvement of U.S. Commercial Banks in Venture Capital | SM26
Paul Pfleiderer, Thomas Hellmann1996
Liz Claiborne, Inc. | F255
Anat R. Admati, Paul Pfleiderer, George Noroian1995

In the Media

Is Modern Portfolio Theory Dead? Come On
TechCrunch, September 11, 2012
In TechCrunch, Paul Pfleiderer says the "the answer is clearly, 'No.'"
Stanford Business School Research in Behavioral Finance: Where Stock Market Psychology and Pricing Intersect
Business Wire, February 2002

Insights by Stanford Business

writtenWhat to Read over the Holidays
December 5, 2017
15 Stanford business professors recommend books for those long winter nights.
writtenEquity: The Recommended List
August 30, 2016
Stanford GSB professors suggest articles and books related to the concept of “equity.”
writtenDo Portfolio Managers Underestimate Risk by Overanalyzing Data?
July 25, 2016
New research questions whether “smart” beta is always smart.
writtenWhy Corporations Get Hooked on Debt
June 17, 2016
Banks are not alone when it comes to being overleveraged.
writtenAnat Admati: The Bankers’ Addiction to Borrowing
October 29, 2013
A finance professor says big banks need tougher capital regulations — for our sake, and for theirs.
written"What's Wrong With Banking and What to Do About It"
January 28, 2013
How, and why, Stanford's Anat Admati took on the banking system.
writtenDefusing a Ticking Time Bomb of Debt
May 14, 2012
Why bankers like leverage — and what that could mean for the global financial system.
writtenStanford Finance Forum Debates Bank Capital and Equity Levels
June 1, 2011
Boston Fed CEO Eric Rosengren says money market mutual funds are vulnerable to the European debt crisis.
writtenAnat Admati: Why Bank Equity Is Not Expensive
September 1, 2010
A finance professor says raising bank capital requirements would produce widespread social benefits as well.
writtenWhere Stock Market Psychology and Pricing Intersect
December 1, 2001
The emerging field of behavioral finance analyzes how deviations from standard rational assumptions may have important effects on stock prices.
writtenWhat's in it for Fund Managers?
September 1, 1996
Two scholars say it's time to ask if the people investing your money are properly motivated.

School News

writtenLearning by Doing, While Doing Good
October 16, 2018
Students take the lead in Stanford GSB Impact Fund to manage investments in mission-driven startups.
writtenStanford GSB Impact Fund’s First Investment Focuses on Personalized Medicine
December 5, 2016
A hands-on learning opportunity for students to manage a fund focused on social and environmental impact, Stanford GSB Impact Fund has made its first investment.
writtenKenneth Singleton Named Editor of Journal of Finance
September 5, 2011
"Finance is becoming increasingly integrated with economics, and is drawing more widely from other disciplines," observes Singleton.