Prior to the announcement of a tender offer, the bidding firm is legally allowed to acquire shares in the open market, subject to some limitations. These pre-announcement purchases are known as toeholds. This paper presents a simple model that describes the bidder's optimal toehold acquisition...

This paper investigates the design of privatization mechanisms in emerging market economies. We identify an emerging market economy by the political constraints that limit the set of viable privatization mechanisms. Our objective is to explain the striking diversity of privatization mechanisms...

This paper investigates how firms’ bidding behavior in various auctions is affected by capital structure. A theoretical model is developed where the first price sealed bid and the English auction are examined. We find as debt levels increase, firms tend to

This paper investigates how firm bidding behavior in various auctions is affected by capital structure. A theoretical model is developed where the first price sealed bid and second price sealed bid auctions are examined in situations where the firms are competing for an asset with either a...

The purpose of this paper is to explore the role of stars and other potential informational signals in the movie business. In the first part of the paper, we explore two alternative economic explanations for the role of stars in motion pictures. The first approach is a signaling view; namely...

This paper investigates the design of privatization mechanisms in emerging market economies characterized by political constraints that limit the set of viable privatization mechanisms. Our objective is to explain the striking diversity of privatization mechanisms observed in practice and the...

We develop a model of corporate myopia in which the interaction between asymmetric information and short-term trading by the firm's equity holders induces firm managers to undertake a short-term projects rather than long-term projects, which are intrinsically more valuable. In this setting, we...

This paper provides a tax induced framework which can explain the linkage between pricing policies and capital structure choice documented in recent studies by Chevalier (1995a), (1995b) and Phillips (1995). The model proves that firms will optimally change their pricing decisions after taking...

We use a sample of small firms to compare efficiency aspects of the creditor oriented old (pre-1993) Finnish bankruptcy code and the debtor oriented US code. We find that although the same economic factors affect liquidations in both the US and Finland, under the Finnish code firms are somewhat...