We consider a problem where an uninformed principal makes a timing decision interacting with an informed but biased agent. Because time is irreversible, the direction of the bias crucially affects the agent's ability to credibly communicate information. When the agent favors late...

This paper links real investment policy to corporate risk management, endogenizing the costs of external financing. Previous literature finds investment efficiency linked to full hedging. In this model, a firm with proprietary information when deciding its investment in a valuable project, may...

This paper aims to shed light on some of the major allocative consequences of financial market bubbles. In March 1997, the Neuer Markt in Germany opened. Six years later, in June 2003, it closed forever. In the interim period lay the spectacular rise and fall of the first and most important...

I study the impact of capital market imperfections on the exercise of a real option. An entrepreneur has private information about a venture for which she seeks outside funding. An initial investment gives access to a continuous flow of information about the project. The duration of that...

I study the impact of capital market imperfections on the exercise of a real option. An entrepreneur has private information about a venture for which she seeks outside funding. An initial investment gives access to a continuous flow of information about the project. The duration of that...

We examine the convertible bonds whose conversion prices can be reset under certain conditions, by extending the asymmetric information framework of Stein (1992). These convertibles are more common in Japan and China and are in sharp contrast with the convertible bonds with fixed conversion...

Why do firms engage in costly, voluntary disclosure of informationwhich is subsumed by a later announcement? We consider a model inwhich the firm's manager can choose to disclose short-term informationwhich becomes redundant later. When disclosure costs are sufficientlylow, the manager discloses...

We ask whether the quality of internal information matters for investment decisions. We predict that investment is more sensitive to internal profit signals and less sensitive to external price signals when managers have higher quality internal information. Consistent with recent theoretical and...

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-relevant information, and decides whether or not to...

We ask whether the quality of internal information matters for investment decisions. We predict that investment is more sensitive to internal profit signals and less sensitive to external price signals when managers have higher quality internal information. Consistent with recent theoretical and...