Henry Cao

Professor of Finance and Chair of Finance Department

PhDs, UCLA and Yale

Areas of Expertise:

Asset Pricing, Behavioral Finance, Cryptocurrencies, Hedge Funds and Alternative Investments, Microstructure, Options Pricing, International Finance

Dr. Cao Huining (Henry) is a Professor of Finance, Chair of the Finance Department and the Academic Director of the Finance MBA at CKGSB. He earned a PhD in Finance in 1995 from UCLA and a PhD in Pathology in 1991 from Yale University.

Before joining CKGSB, he taught at UC Berkeley, UCSD, Ohio State University, Carnegie Mellon and UNC Chapel Hill.

Cao’s research has been published in journals including Journal of FinanceReview of Financial StudiesJournal of Financial EconomicsJournal of Economic TheoryJournal of BusinessReview of Finance and Marketing Science. Cao is the co-editor of International Financial Review and sits on the editorial board of Annals of Economics and Finance and China Financial Review.

  • EMBA
  • EE
  • Chinese MBA
  • English MBA
  • Global Programs

Hedge Funds and Alternative Investments
Non-traditional Investments
Behavioral Finance


Dr. Cao has received numerous awards for teaching and research excellence, including:

  • Smith-Breeden Award in 1998 (nomination)
  • Journal of Finance Best Paper Award in 2000 (nomination)
Selected Publications
  1. “Taking The Road Less Traveled By: Does Conversation Eradicate Pernicious Cascades?” H. Henry Cao, Bing Han, and David Hirshleifer, Journal of Economic Theory, 146 (4), July, (2011): 1418-1436.
  2. Fear of The Unknown: The Effects of Familiarity on Financial Decisions,  H. Cao, Bing Han,  David Hirshleifer and Harold H. Zhang, Review of Finance, 2011,15 (1): 173-206. Won the runner-up of the “2011 Spängler IQAM Best PaperPrize”.
  3. Portfolio Performance Measurement: A No Arbitrage Bounds Approach,” with Dong-Hyun Ahn,  H. Caoand Stephane Chretien, European Financial Management,2009, 15 (2):298-339.
  4. “Differences of Opinion of Public Information and Speculative Trading in Stocks and Options,”  H. Caoand Hui Ou-Yang, Review of Financial Studies, 2009, 22(1):299-335; Won the third place best paper award at 2004 CIFC and best paper award most relevant to practitioners at 2005 WFA.
  5. “Inventory Information,”   H. Cao,  Martin Evans and Rich Lyons, Journal of Business, 2006, 79:325-364.
  6. “Model Uncertainty, Limited Market Participation and Asset Prices,” H. Cao,  Tan Wang and Harold H. Zhang,  Review of Financial Studies,  2005,1219 – 1251.
  7. “The Dynamics of International Equity Market Expectations,”  Michael J. Brennan,  H. Cao, Norman Strong and  Xinzhong Xu, Journal of Financial Economics,  2005,257-288
  8. “Product Strategy for Innovators in Markets with Network Effects,” Sun, B., Xie, J. and  H. Cao,  Marketing Science, 2004, 243-254.
  9. “Sidelined Investors, Trading-Generated News, and Security Returns,”  H. Cao,  J. Coval and D. Hirshleifer, Review of Financial Studies, 2002, 15, 615-648.
  10. “Imperfect Competition Among Informed Traders,” K. Back,  H. Caoand G. Willard, Journal of Finance,  2000, 5, 2117-2155. Nominated for Smith-Breeden Prize.
  11. “The Effect of Derivative Assets on Endogenous Information Acquisition and Price Behavior in  a Rational Expectations Equilibrium,”  H. CaoReview of Financial Studies, 1999, 12, 131-163.
  12. “International Portfolio Investment Flows,”  Michael J. Brennan and H. CaoJournal of  Finance, 1997,  52,  1851-1880, Nominated for Smith-Breeden Prize. Best paper award in emerging market research at NFA. Reprinted in International Library of Critical Writings in Financial Economics, Edited by Richard Roll.
  13. “Information, Trade, and Derivative Securities,”  Michael J. Brennan and  H. Cao, Review of   Financial  Studies, 1996,  9, 163-208.
Other Papers
  1. “A Subdomain in the Transmembrane Domain Is Necessary for P185neu* Activation,” H. N. Cao, L. Banglore L, B. J. Bormann, D. F. Stern. EMBO Journal., 1992, 11 (3): 923-932.
  2. “An Extra Cysteine Proximal to the Transmembrane Domain Induces Differential Cross-Linking of P185(neu) and P185*(neu*),” H. N. Cao, L. Banglore, C. Dompe, B. J. Bormann, D. F. Stern, Journal of Biological Chemistry, 1992, 267: 20489-20492.
  3. “TPA Inhibits the Tyrosine Kinas-Activity of the Neu Protein In Vivo and In Vitro,” H. N. Cao, S. DECKE, D. F. STERN, 1991, Oncogene, 6: 705-711.
  4. “Oncogenic Activation of P185new Stimulates Tyrosine Phosphorylation in Vivo,” D. F. Stern, M. P. Kamps, H. Cao, Molecular and Cellular. Biology, 1988, 8: 3969-3973.
  5. “Cell-Surface Expression of a Membrane-Anchored Form of the Human Chorionic-Gonadotropin Alpha-Subunit,” J. L. Guan, H. Cao, J. K. Rose, Journal of Biological Chemistry, 1988, 263: 5306-5313.
  6. “Effects of Altered Cytoplasmic Domains on Transport of the Vesicular Stomatitis-Virus Glycoprotein Are Transferable to Other Proteins,” J. L. Guan, A. Ruusala, H. Cao, J. K. Rose, 1988, Molecular and Cellular Biology, 8: 2869-2874.
Working Papers
  1. “Bubbles and Panics in a Frictionless Market with Heterogeneous Expectations,” with Hui Ou-Yang, revise and resubmit, Journal of Economic Theory.
  2. “Fear of The Unknown: The Effects of Familiarity on Financial Decisions,” with David Hirshleifer and Harold H. Zhang, revise and resubmit, Review of Finance.
  3. “Beauty Contests, Risk Shifting, and Bubbles” with Hui Ou-Yang, presented at 2009, AFA conference.
  4. “Trade Disclosure and Imperfect Competition among Insiders,” with Y. Ma, presented at 2000 WFA.
  5. “On the Possibility of Informationally Efficient Markets,” presented at 1999 AFA conference.
  6. “Transaction Risk Derivative Assets, and Equilibrium,” working paper.
  7. “A Partially Revealing Rational Expectations Equilibrium in the Presence of Nonmarketable Assets,” working paper.
  8. “Speculative Financial Innovation,” working paper.