This paper analyzes the disclosure strategy of firms that face uncertainty regarding the investor's response to a voluntary disclosure of the firm's private information.This paper distinguishes itself from the existing disclosure literature in that firms do not use voluntary disclosures to...

We consider a principal-agent setting in which a manager’s compensation de- pends on a noisy performance signal, and the manager is granted the right to choose an (accounting) method to determine the value of the performance signal. We study the effect of the degree of such reporting...

We study financial contagion in an experimental market. There are two assets and an exogenous shock reduces the value of one of the two assets. Whether and how the other asset is affected depends on the correlation between the underlying values of the two assets. In some trials, the...

This paper shows how post earnings announcement drift may arise in a capital market with rational investors if the firm's earnings in consecutive periods are positively correlated and there is a fixed supply of the firm's shares.This result is driven by the fact that equilibrium share prices...

Stock markets and betting markets co-exist for professional soccer clubs listed on the London Stock Exchange.For each firm, two pieces of information are released to the stock market on a weekly basis from August to June: experts expectations about game outcomes through the betting odds, and the...

When-issued trading concerns transactions in securities that have not yet been issued. This type of trade often takes place in a so-called ‘grey market’, in which all contracts are conditional on the issuance of the security. In this paper, we investigate the Dutch grey market for...

This paper provides an overview of existing research on how corporate restructuring affects the wealth of creditors.Restructuring is defined as any transaction that affects the firm's underlying capital structure.Thus, it reaches well beyond asset restructuring and includes transactions such as...

This paper contributes to the comparative corporate governance literature by showing how cross-country differences in governance and legal standards affect the bondholder wealth effects of European merger and acquisitions (M&As).Using investment-grade Eurobonds, we find some remarkable...

This paper analyzes convertible bond arbitrage on the Canadian market for the period 1998 to 2004.Convertible bond arbitrage is the combination of a long position in convertible bonds and a short position in the underlying stocks. Convertible arbitrage has been one of the most successful...

Abstract: Major bubble episodes are rare events. In this paper, we examine what factors might cause some asset price bubbles to become very large. We recreate, in a laboratory setting, some of the specific institutional features investors in the South Sea Company faced in 1720. Several factors...