Admati, Anat R; Pfleiderer, Paul; Zechner, Josef - In: Journal of Political Economy 102 (1994) 6, pp. 1097-1130
The authors develop a model in which a large investor has access to a costly monitoring technology affecting securities' expected payoffs. Allocations of shares are determined through trading among risk-averse investors. Despite the free-rider problem associated with monitoring, risk-sharing...