We analyze the consequences of activism in a regulated industry where the regulator has been captured by the industry. Unlike ordinary economic agents, activists are insensitive to monetary incentives. Moreover, they are less well informed than regulators and their actions generate dead-weight...

From its inception, the federal securities law regime created and enforced a major divide between public and private capital raising. Firms that chose to “go public” took on substantial disclosure burdens, but in exchange were given the exclusive right to raise capital from the general...

In this paper, we discuss the choice for build–operate-and-transfer (BOT) concessions when governments and firm managers do not share the same information regarding the operation characteristics of a facility. We show that larger shadow costs of public funds and larger information asymmetries...

We investigate the nature and extent of information asymmetry among traders in companies with government ownership. Consistent with a less transparent information environment, we find relatively less informed trading in the shares of firms with government presence, and specifically, fewer...

We analyze a setting common in privatizations, public tenders, and takeovers in which the ex post efficient allocation, i.e., the first best, is not implementable. Our first main result is that the open ascending auction is not second best because it is prone to rushes, i.e., all active bidders...

We investigate the nature and extent of information asymmetry among traders in companies with government ownership. Consistent with a less transparent information environment, we find relatively less informed trading in the shares of firms with government presence, and specifically, fewer...

This paper analyzes a contest in which defenders move first, have private information about the value of the objects they are trying to protect, and determine the observability of their defense efforts. The equilibrium consistent with the intuitive criterion depends on the distribution of...

When privatizing, governments have conflicting objectives, like raising revenues and minimizing induced unemployment. We construct two mechanisms that take into account both criteria: a first-score auction in which bidders bid both in terms of price and retained excess labor, and a first-price...

This paper provides the conditions under which small enough private uncertainty on an aggregate endogenous state of the economy can invalidate uniqueness of the equilibrium. The main result is presented in a fully microfounded macroeconomic model where agents learn from arising prices. The...