This paper develops a dynamic trade-off model of optimal capital structure that takes intoaccount the fact that most firms have both invested assets and growth opportunities. Thesetwo sources of value react quite differently to business cycle risk. In particular, growth optionsare more sensitive...

Although examples of deception and fraud in business have generated widespread interest in themotivations for honest behavior, little is known about individual differences in the propensity totell the truth. This paper highlights the role of honesty as a protected value, maintaining thatsome...

This paper studies the extent to which risk-taking incentives of CEOs and other governancefeatures in a range of years prior to the recent financial crisis were related to the write-downsof U.S. financial institutions during the crisis. We document that institutions whose CEOs hadparticularly...

This article examines the recent regulatory developments with regard to shortselling. Short selling regulation is an important factor in firm governancebecause it affects the way in which firms are subject to market discipline. Asthe financial crisis has attracted regulators’ notice to short...

Some people are motivated by the non-selfish, non-strategic, and non-consequentialist “sacredvalue” of Truth. We conduct the first experiment directly assessing this phenomenon. We findthat people differ substantially in their truthfulness, with a large minority powerfully inclined...