We study optimal disclosure rules that alleviate inefficiencies caused by managerial private benefits. An entrepreneur raises capital from investors by designing a security and an associated covenant. The covenant allocates the control right of the project to the entrepreneur or investors in the...

We study the optimal disclosure policy in a sender-receiver communication game where the receiver's morale, defined as his expected state of the world, affects his performance. The sender observes the state and chooses whether to disclose it to the receiver, who then decides whether to...