Chad Kendall

Doctoral Candidate

I am a PhD candidate at the Vancouver School of Economics, University of British Columbia. I am a job market candidate for 2013-14 and will be available for interviews at the AEA/ASSA/AFA meetings in January in Philadelphia.

I am an applied theorist working in the field of finance. I am mainly interested in issues related to financial market operation: information aggregation, information acquisition, contagion, and regulation. In addition to my theoretical work, I collect data in laboratory experiments to better understand individual and overall market behavior.

I have an MA (economics) and B.A.Sc. in engineering physics from Simon Fraser University. Prior to studying finance and economics, I had a successful career as a semiconductor design engineer. I am co-inventor of eight US and European patents.

Please click on paper titles for abstracts and full text downloads.


I consider a sequential trading model with both trade timing and information acquisition decisions. Traders benefit from waiting to acquire additional information before trading, but waiting is costly because others may then trade before them. I determine the conditions under which traders rationally panic, rushing to trade to avoid adverse price movements. When panics occur, information is forgone, causing prices to aggregate only weak information. Counter-intuitively, better quality information can result in less information being aggregated. Panics are shown to occur during times of uncertainty so that, perversely, information is forgone precisely when it is most valuable. Strategic complementarity in timing decisions induces a multiplicity of equilibria, allowing expectations of panic to become self-fulfilling. I present several testable predictions, some of which are consistent with existing empirical evidence.

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Market panics may result from traders’ equilibrium behavior or from less rational sources. I study traders in a laboratory setting in which theory provides precise predictions as to when panics, defined as buying or selling prior to receiving full information, are rational, and when they are not. Robust, rational panics occur in the data and result in extreme trade clustering and large informational losses. Panics that cannot be explained by equilibrium theory also occur, exacerbating informational losses and resulting in unpredicted trade clustering and short-term correlations in returns. These real-world phenomena are a result of almost half of traders relying on a simple trading heuristic that experience does not eliminate. Implications of the evidence for non-laboratory asset markets are discussed.

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In a large-scale controlled trial in collaboration with the reelection campaign of an Italian incumbent mayor, we administered (randomized) messages about the candidate’s valence or ideology. Informational treatments affected both actual votes in the precincts and individual vote declarations. Campaigning on valence brought more votes to the incumbent, but both messages affected voters’ beliefs. Cross-learning occurred, as voters who received information about the incumbent also updated their beliefs about his opponent. With a novel protocol of beliefs elicitation and structural estimation, we assess the weights voters place upon politicians’ valence and ideology and employ the model to simulate counterfactual campaigns.

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We apply a regression discontinuity approach to determine incumbency advantages in the Canadian Parliament, finding that incumbents enjoy a 9.4–11.2% increased probability of winning over non-incumbents. Owing to the presence of multiple parties, an incumbency advantage in terms of vote share does not always translate to an increased probability of winning, because incumbents do not necessarily obtain votes from their closest opponent. Also, under the assumption that strategic exit is not an issue, we are able to split the incumbency advantage into party incumbency and individual candidate incumbency components, finding that the advantage is almost entirely due to the individual.

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I can teach core courses in microeconomic theory, financial theory, and theoretical asset pricing. Topics courses I would be interested in teaching include experimental economics and the role of information in financial markets.