When a seller gives a buyer a right of first refusal, although it reduces the competing buyers' profits and creates an inefficiency, it always increases the joint profit of the seller and the right holder. Right of first refusal with a consideration (e.g., a payment from the right holder to the...

The 1993 Japanese financial system reform allowed banks to enter the underwriting market for corporate bonds through bank-owned security subsidiaries. This paper examines empirically whether underwriting commissions and spreads for corporate bonds fell as a result of this bank entry. The...

This paper is concerned with the general question of the provision of information by financial intermediaries to their customers. Specifically, it analyzes the different ways the market can be organized and its effects on pricing and the level of information investors obtain. We find that market...

A possible view of the role of an adjudicator is that it is to obtain the information that is needed to apply a well-articulated legal rule. That is, the task of an adjudicator in a case is to gather and verify the information that is called for to employ a legal rule, but that once the required...

This paper assesses the effects of agency costs and asymmetric information in credit markets. Asymmetric information and agency costs occur whenever lenders delegate control over resources to borrowers, leading to adverse selection, moral hazard and monitoring costs because of the inability to...

This paper investigates the economic principles underlying the relationship between the real sector (non-financial) and the banking sector structures. Most literature has so far focused on the structure of conglomerates (Keiretsu/Chaebol) in East Asia in explaining the fast economic growth...

To investigate players' incentives in coalition formation, we consider a legislative bargaining game with asymmetric information about time preferences. The force that does not exist in usual bargaining games with unanimity is that due to majority rule, if a player signals himself as the patient...

It is known that stock returns are affected by monetary policy. This paper theoretically and empirically investigates whether asymmetric information between the Federal Reserve and the public causes the relation between stock returns and monetary policy actions. The paper concludes that...

I argue in favor of a competitive screening approach for studying the question of coalition formation in exchange economies under asymmetric information. I obtain a new notion of core that refines Wilson (1978)'s coarse core. It is nonempty under the standard regularity conditions. I also...

One of the basic principles that allow a smooth operation of the markets is the equilibrium between supply and demand. According to this principle, when demand exceeds supply, the price mechanism will try to bring the system back into equilibrium. When this thinking is applied to the housing...