This paper examines the impact of SOX on the total cost and the component cost of going public. First, we document a statistically significant increase in non-underwriting expenses of 0.8 percentage points after the introduction of SOX, which is mostly due to an increase in accounting and legal...

Rhodes-Kropf and Viswanathan (2004) suggest an adverse selection role of corporate cashreserve. Specifically, if investors know a bidder does not have to issue to invest, an attempt to doso sends a strong pessimistic signal of overvaluation. Despite its intuitiveness, this notion has notbeen...

This paper studies the matching of opportunities with talent when costly diagnosisconfers an informational advantage to the agent undertaking it. When this agentis under-qualified, adverse selection prevents efficient referrals through fixed-pricecontracts. Spot-market contracts that rely on...

We study an economy where agents are heterogeneous in terms of observablewealth and unobservable talent. Adverse selection forces creditors to ask forcollateral. We study the two-way interaction between rationing in the creditmarket and the wages offered in the labor market. Both pooling and...

We study market inefficiencies and policy remedies when agents choose their occupations, and entrepreneurialtalent is subject to private information. Untalented entrepreneurs depress the returns to entrepreneurshipbecause of adverse selection. The severity of this problem depends on the outside...

This paper empirically examines the impact of temporary agency work on firm performanceusing panel data from German establishments. Thereby, special attention is devoted to thequestion, whether there are performance differences between firms using temporary agencyworkers (TAWs) as a buffer stock...

Although international programs for carbon osets play an important role incurrent and prospective climate change policy, they continue to be very controver-sial. Assymmetric information creates several incentive problems, include adverseselection and moral hazard, in oset markets. The current...

With adverse selection, diseconomies of scale associated with hierarchies may induce the implementation of a second-best technology. This occurs whenever rents to lower tiers of the hierarchy increase faster than total surplus. This is more likely with longer hierarchies.

We examine how asymmetric information and competition in the credit market affect voluntary information sharing between lenders. We study an experimental credit market in which information sharing can help lenders to distinguish goodborrowers from bad ones, because borrowers may exogenously...