Stock prices are more informative when the information has less social value. Speculators with limited resources making costly (private) information production decisions must decide to produce information about some firms and not others. We show that producing and trading on private information...

There is a tenuous link between market efficiency and economic efficiency in that stock prices are more informative when the information has less social value. We theoretically and empirically investigate this link in the context of CEO turnover. Our theoretical model predicts that, although the...

We study the dynamics of managerial influence and Chief Executive Officers' (CEOs) compensation over the course of financial distress during 1992 to 2012. Using a matching estimator to identify suitable controls, we find that under distress firms reduce managerial board appointments, intensify...

Stock prices are more informative when the information has less social value. Speculators with limited resources making costly (private) information production decisions must decide to produce information about some firms and not others. We show that producing and trading on private information...

There is a debate on whether executive pay reflects rent extraction due to "managerial power" or is the result of arms-length bargaining in a principal-agent framework. In this paper we offer a test of the managerial power hypothesis by empirically examining the CEO compensation of U.S. public...