The purpose of this paper is to explain the role of institutions in different corporate governance arrangements. It applies the logic of trade-off amongst the marginal costs of participants in business organizations as a framework for analyzing corporate governance arrangements in different...

Dubey and Geanakoplos [2002] have developed a theory of competitive pooling, which incorporates adverse selection and signaling into general equilibrium. By recasting the Rothschild-Stiglitz model of insurance in this framework, they find that a separating equilibrium always exists and is...

While significant effort has been devoted to characterizing the role that irreversibility plays in individual agents' investment behavior, very little has been devoted to the aggregate economic implications of investment irreversibility. Yet irreversibility prevents the continual allocation of...

We explore factors affecting liquidity by examining the relation between liquidity changes and changes in firm characteristics around mergers and acquisitions. We find that spreads decline as the number of analysts, number of shareholders, number of market makers, firm size, and volume increase...