We build a Markov regime switching model to examine the role of heterogeneous expectations in the forward exchange market, where the regime could be fundamentalists or chartists. Our empirical analysis of EUR/USD and USD/JPY forward markets suggest that the fundamen-talists who follow negative...

It is shown that the government, in privatizing state owned enterprises, can use partial privatization as a screening mechanism to elicit private information from the manager about the firm's value. Although some new owners do not have maximum incentives, this screening contract allows the...