We study how interest alignment between CEOs and corporate boards influences investment efficiency and identify a novel … force behind the benefit of misaligned preferences. Our model entails a CEO who encounters a project, gathers investment …

dynamically optimize over consumption, investment in capital, and investment in information. The model predicts that investors … financial sector, such as the sources of variation in returns on information acquisition for investment banks or private equity …

and endogenous crashes. Our model provides a theory of the origins of disagreement: individuals disagree about both …

how communication mitigates this free-riding problem in an investment-timing game. In our baseline investment-timing game … investor of the group bears the costs of investment while everyone in the group benefits if the project reveals high returns … communicate before choosing the investment time. We find that in groups of two players, communication increases cooperation and …

investment timings. Players choose when to invest in a nonrival project with uncertain returns. The earliest investor bears the … costs of investment and all players learn whether the project is of good or bad quality. Informational externalities create … free-riding incentives resulting in strategic delays in investment timings. Our theoretical analysis suggests that …