About

Burton Hollifield is the PNC Professor of Finance and a Professor of Financial Economics at the Tepper School of Business. His role involves engaging in research and teaching within the fields of finance and financial economics, contributing to the academic leadership of the institution. As a faculty member, he is involved in shaping the strategic vision of the Tepper School, which emphasizes the intersection of business, technology, and analytics, and is guided by the school's strategic plan for 2024-2030. His work supports the school's mission to lead in innovative business education and thought leadership in areas related to finance.

Research topics

• Monetary economics
• Economics
• Financial system
• Financial economics
• Finance
• Business
• Microeconomics
• Actuarial science

Selected publications

• Market-Dependent Communication in Multi-Agent Alpha Generation

  ArXiv.org · 2025-11-17

  preprintOpen accessSenior author

  Multi-strategy hedge funds face a fundamental organizational choice: should analysts generating trading strategies communicate, and if so, how? We investigate this using 5-agent LLM-based trading systems across 450 experiments spanning 21 months, comparing five organizational structures from isolated baseline to collaborative and competitive conversation. We show that communication improves performance, but optimal communication design depends on market characteristics. Competitive conversation excels in volatile technology stocks, while collaborative conversation dominates stable general stocks. Finance stocks resist all communication interventions. Surprisingly, all structures, including isolated agents, converge to similar strategy alignments, challenging assumptions that transparency causes harmful diversity loss. Performance differences stem from behavioral mechanisms: competitive agents focus on stock-level allocation while collaborative agents develop technical frameworks. Conversation quality scores show zero correlation with returns. These findings demonstrate that optimal communication design must match market volatility characteristics, and sophisticated discussions don't guarantee better performance.

  PublisherOA PDFDOI

• Predictive Power of LLMs in Financial Markets

  arXiv (Cornell University) · 2024 · 1 citations

  Senior authorCorresponding
  • Business
  • Economics
  • Financial system

  Predicting the movement of the stock market and other assets has been valuable over the past few decades. Knowing how the value of a certain sector market may move in the future provides much information for investors, as they use that information to develop strategies to maximize profit or minimize risk. However, market data are quite noisy, and it is challenging to choose the right data or the right model to create such predictions. With the rise of large language models, there are ways to analyze certain data much more efficiently than before. Our goal is to determine whether the GPT model provides more useful information compared to other traditional transformer models, such as the BERT model. We shall use data from the Federal Reserve Beige Book, which provides summaries of economic conditions in different districts in the US. Using such data, we then employ the LLM's to make predictions on the correlations. Using these correlations, we then compare the results with well-known strategies and determine whether knowing the economic conditions improves investment decisions. We conclude that the Beige Book does contain information regarding correlations amongst different assets, yet the GPT model has too much look-ahead bias and that traditional models still triumph.

  PublisherOA PDFDOI

• Asset Prices and Portfolios with Externalities

  Review of Finance · 2022 · 59 citations

  • Economics
  • Microeconomics
  • Monetary economics

  Abstract Elementary portfolio theory implies that environmentalists optimally hold more shares of polluting firms than non-environmentalists, and that polluting firms attract more investment capital than otherwise identical non-polluting firms through a hedging channel. Pigouvian taxation can reverse the aggregate investment results, but environmentalists still overweight polluters. We introduce countervailing motives for environmentalists to underweight polluters, comparing the implications when environmentalists coordinate to internalize pollution, or have nonpecuniary disutility from holding polluter stock. With nonpecuniary disutility, introducing a green derivative may dramatically alter who invests most in polluters, but has no impact on aggregate pollution.

  PublisherOA PDFDOI

• What Broker Charges Reveal About Subprime Mortgage Credit Risk

  The Journal of Real Estate Finance and Economics · 2020

  • Business
  • Financial system
  • Monetary economics
  PublisherDOI

• Municipal Bond Markets

  Annual Review of Financial Economics · 2019-10-21 · 60 citations

  article

  The effective functioning of the municipal bond market is crucial for the provision of public services, as it is the largest capital market for state and municipal issuers. Prior research has documented tax, credit, liquidity, and segmentation effects in municipal bonds. Recent regulatory initiatives to improve transparency have made granular trade data available to researchers, rendering the municipal bond market a natural laboratory for the study of financial intermediation, asset pricing in decentralized markets, and local public finance. Trade-by-trade studies have found large trading costs, contemporaneous price dispersion, and other deviations from the law of one price. More research is required to understand optimal market design and the impact of post-crisis regulation, sustainability, and financial technology.

  PublisherDOI

• Asset Prices and Portfolios with Externalities

  SSRN Electronic Journal · 2019-01-01 · 19 citations

  articleOpen access
  PublisherDOI

• Should State Governments Prohibit the Negotiated Sales of Municipal Bonds?

  SSRN Electronic Journal · 2019-01-01 · 14 citations

  articleOpen access
  PublisherDOI

• Preventing Controversial Catastrophes

  The Review of Asset Pricing Studies · 2018-12-21 · 23 citations

  article

  Abstract We model, in a market-based democracy, different constituencies that disagree regarding the likelihood of economic disasters. Costly public policy initiatives to reduce or eliminate disasters are assessed relative to private alternatives presented by financial markets. Demand for such public policies falls as much as 40% with disagreement, and crowding out by private insurance drives most of the reduction. As support for disaster-reducing policy jumps in periods of disasters, costly policies may be adopted only after disasters occur. In some scenarios constituencies may even demand policies oriented at increasing disaster risk if these policies introduce speculative opportunities. Received September 25, 2017; Editorial decision September 3, 2018 by Editor: Thierry Foucault

  PublisherDOI

• Preventing Controversial Catastrophes

  Finance and Economics Discussion Series · 2018-07-01

  articleOpen access

  In a market-based democracy, we model different constituencies that disagree regarding the likelihood of economic disasters. Costly public policy initiatives to reduce or eliminate disasters are assessed relative to private alternatives presented by financial markets. Demand for such public policies falls as much as 40% with disagreement, and crowding out by private insurance drives most of the reduction. As support for disaster-reducing policy jumps in periods of disasters, costly policies may be adopted only after disasters occur. In some scenarios constituencies may even demand policies oriented to increase disaster risk if these policies introduce speculative opportunities.

  PublisherDOI

• Municipal Bond Markets

  SSRN Electronic Journal · 2018-01-01 · 12 citations

  articleOpen access
  PublisherDOI

Frequent coauthors

• Patrik Sandås

  Engineering Systems (United States)

  25 shared

• Michael F. Gallmeyer

  University of Virginia

  25 shared

• Stanley E. Zin

  New York University

  21 shared

• Norman Schürhoff

  Swiss Finance Institute

  20 shared

• Antje Berndt

  18 shared

• Richard C. Green

  15 shared

• Emilio Osambela

  Federal Reserve Board of Governors

  12 shared

• Dan Li

  Federal Reserve

  10 shared