We analyze whether bond investors price tail risk exposures of financial institutions using a comprehensive sample of bond issuances by U.S. financial institutions. Although primary bond yield spreads increase with an institutions' own tail risk (expected shortfall), systematic tail risk...

Using a large sample of U.S. acquiring and non-acquiring firms and covering a broad sample of transactions, we examine the effects of mergers and acquisitions (M&A) on CEO compensation during 1993-2006, a period of intense M&A activity. We alleviate endogeneity concerns through dynamic panel...

We examine whether financing commitments from a target firm's financial advisor, in the form of stapled financing, provide certification of target value. Using a dataset of leveraged buyouts spanning 2002-2011, and addressing endogeneity issues, we find that stapled financing has significantly...

We examine the effects of parameter uncertainty and Bayesian learning on equilibrium asset prices when all the structural parameters of the aggregate consumption and dividend growth rate processes are unknown. With realistic calibration of a parsimonious set of prior parameters, the model...

Information and learning environments shape the dynamics of our beliefs that determine asset prices. When an agent jointly learns about consumption and dividend, her beliefs on them inter-temporally co-vary with each other, decoupled from their true underlying relationship. Such...

We theoretically and empirically analyze information generation by stock markets on economic prospects of innovations and the resultant feedback effect on firm-level innovation-related investment (IRI). By modeling the unique aspects of firm-specific and systematic drivers of innovation profits,...