We compare the following multi-stage inter-dealer trading mechanisms: a one-shot uniform-price auction, a sequence of unit auctions (sequential auctions), and a limit-order book. With uninformative customer orders, sequential auctions are revenue-preferred because winning dealers in earlier...

This paper studies whether two-stage trading mechanisms that involve inter-dealer trading after a customer-dealer trade improve welfare over the one-shot settings traditionally analyzed in the market microstructure literature.A main finding of the paper is that two-stage trading dominates...

We analyze the customer's choice with respect to a limit-order book, a dealership market, and a hybrid market structure. The customer's order is competed for and divided among risk averse market makers (limit-order providers) with heterogeneous inventories. Main conclusions of the paper are as...

We consider a model of divisible good auctions that allows for both private information and uncertain noncompetitive demand. By placing restrictions on preferences and distributions, we are able to obtain explicit solutions for linear, symmetric strategy equilibria. The model allows us to...

This paper presents a model of Dutch auction share repurchases which yields predictions about the relationship between firm characteristics (in terms of ownership structure, firm size, etc.) and the auction oucome (in terms of repurchase premium and aggregate supply elasticity). We find...

We consider a moral hazard setup wherein leveraged firms have incentivesto take on excessive risks and are thus rationed when they attempt toroll over debt. Firms can sell assets to alleviate rationing. Liquidatedassets are purchased by non-rationed firms but their borrowing capacityis also...

We characterize incentive-efficient merger outcomes when payments can be made both in cash and stock. Each firm has private information about both its stand-alone value and a component of the (possibly negative) potential synergies. We study two cases: when transfers can, and cannot, be made...

This paper develops a dynamic model of the capital structure based on the need to collateralize loans with tangible assets. The model provides a unified theory of optimal firm financing in terms of the optimal capital structure, investment, leasing, and risk management policy. Tangible assets...

We study whether borrowers optimally conserve debt capacity to take advantage of investment opportunities due to temporarily low asset prices, when financing is subject to collateral constraints due to limited enforcement. We find that borrowers may exhaust their debt capacity and thus may be...