A firm can merge with one of n potential partners. The owner of each firm has private information about both his firm's stand-alone value and a component of the synergies that would be realized by the merger involving his firm. We characterize incentive-efficient mechanisms in two cases. First,...

We present an asymmetric information model of hedging that has the intuition that hedging is undertaken by higher ability managers who wish to "lock-in" the higher profits that result from their higher ability. Thus, hedging is an attempt to improve the informativeness of the learning process by...