Within a sample of firms undergoing financial distress, where the incentive to send false positive signals is high, we show that insider trading serves as a credible information channel about potential recovery for outside investors. We employ credit rating downgrades as confirmation of the...

The rank list model is a general non-parametric choice model that provides an intuitive and flexible framework to capture rational consumers' preferences. The rank list model assumes that each customer has a fixed and consistent preference ranking over all products and chooses the product that...