rationality, the combination of experts' moral hazard and investors' learning generates bubble-like price dynamics: gradual … upswing, overshoot, and reversal. Consistent with empirical observations, hedge funds "ride" price swings, adjusting holdings … counter-cyclically to other financial intermediaries. Capping fees may lower fund leverage, dampen price swings, and improve …

, price impact has two components: one due to asymmetric information (as in Kyle (1985)) and one due to moral hazard (a new … source of adverse selection). Price impact is higher when the activist is more productive and when uncertainty about his … obtain a trade-off: with more noise trading (less 'price efficiency') the activist can build up a larger stake, which leads …

live in a "bubble" of price insulation. As drug prices rise, insurers must raise premiums to sustain the bubble. So …, patients are fully, yet indirectly, exposed to the full extent of the cost increase. By numbing patients to price variations …

, price impact has two components: one due to asymmetric information (as in the seminal Kyle (1985) model) and one due to … moral hazard (a new source of illiquidity). Price impact is higher the more severe the moral hazard problem, which … corresponds to a more productive activist. We thus obtain a trade-off: with more noise trading (less `price efficiency') the …