Recent developments in financial economics have included many explorations into market microstructure, that is, the internal functioning of markets and the ways in which they provide liquidity to traders. An important contribution of this literature is that prices can deviate from their...

We explore signaling behavior in settings with a discriminating activity and several costly nondiscriminating ("money-burning") activities. Existing theory provides no basis for selecting one method of burning money over another. When senders have better information about activity costs than...

Mutual funds whose share prices are not calculated with enough precision face the danger of opportunistic trading. This fact is documented empirically with respect to the Government Securities Investment Fund (G Fund), a part of the defined contribution plan run by the US federal government for...

We explore signaling behavior in settings with a discriminating signal and several costly nondiscriminating ( money burning ) activities. In settings where informed parties have many options for burning money, existing theory provides no basis for selecting one nondiscriminating activity over...

This paper explores whether speculative activity can,in practice,generate the ARCH- type behavior found in .nancial time series.Specifically,G7 equity marke indices are examined for evidence of a dynamic whereby speculative interest is self-sustaining, that is,markets can become 'hot'. A...

December 1995 <p>We explore signaling behavior in settings with a discriminating signal and several costly nondiscriminating ("money burning") activities. In settings where informed parties have many options for burning money, existing theory provides no basis for selecting one nondiscriminating...</p>