We analyze the (Perfect Bayesian) equilibrium in an observational learning model with communication and bilateral incentive contracts when pairs of agents sequentially make decisions based on internal communications and the observed history of decisions by other groups. One of the agents in each...

We examine voluntary disclosure and capital investment by an informed manager in an initial public offering (IPO) in the presence of informed and uninformed investors. We find that in equilibrium, disclosure is more forthcoming — and investment efficiency is lower — when a greater fraction...

We study the choice of disclosure and share repurchase strategies of informed managers using a model that captures how they differentially impact short and long-term stock value. We identify a partial disclosure equilibrium in which firms in the lowest value region neither disclose nor...

We examine voluntary disclosure and capital investment by an informed manager in an initial public offering (IPO) in the presence of informed and uninformed investors. We find that in equilibrium, disclosure is more forthcoming — and investment efficiency is lower — when a greater fraction...

We examine information aggregation regarding industry capital productivity from privately informed managers in a dynamic model with optimal incentive contracts. Information cascades always occur if managers enjoy limited liability: when beliefs regarding productivity become endogenously extreme...

We revisit the unsettled question of the effects of information asymmetry on corporate hedging by testing three relevant theories. Exploiting mergers or closures of brokerage firms as plausibly exogenous information asymmetry events, we find that treatment firms significantly reduce...