Direct government intervention in a market may induce violations of the law of one price in other, arbitrage-related markets. I show that a government pursuing a non-public, partially informative price target in a model of strategic market-order trading and segmented dealership generates...

This study shows theoretically and empirically that a firm's agency problems may affect its stock liquidity. We postulate that less uncertainty about suboptimal managerial effort (or investment) may enhance liquidity provision by lowering dealers' perceived adverse selection risk from trading...

We examine the effects of political uncertainty surrounding the outcome of U.S. presidential elections on financial market quality. We postulate those effects to depend on a positive relation between political uncertainty and information asymmetry among investors, ambiguity about the quality of...