Over the years, scholars from several different fields, including corporate finance, transaction cost economics, and law, have challenged the famous Modigliani & Miller Irrelevance Hypothesis. Under what conditions, they have inquired, does the choice between debt and equity finance affect the...

We present evidence on the objective function of bank management - that is, are they risk neutral and minimize expected profits or are they risk-averse and trade off profit for risk reduction? We extend the model of Hughes and Mester (1993) to allow a bank’s choice of its financial capital...

Over the years, scholars from several different fields, including corporate finance, transaction cost economics, and law, have challenged the famous Modigliani & Miller Irrelevance Hypothesis. Under what conditions, they have inquired, does the choice between debt and equity finance affect the...

We present evidence on the objective function of bank management - that is, are they risk neutral and minimize expected profits or are they risk-averse and trade off profit for risk reduction? We extend the model of Hughes and Mester (1993) to allow a bank’s choice of its financial capital...

Analyzing data from the 1989 Survey of Consumer Finances, we find credit card borrowing is inversely correlated with a household’s willingness to comparison shop for loans and deposits. Households with larger balances have higher disutility of search, ceteris paribus. In addition, these...

Analyzing data from the 1989 Survey of Consumer Finances, we find credit card borrowing is inversely correlated with a household’s willingness to comparison shop for loans and deposits. Households with larger balances have higher disutility of search, ceteris paribus. In addition, these...