The paper presents a model where financial intermediaries invest in a safe and a risky, two-period asset -with aggregate and idiosyncratic shocks on tire risky asset. The realization of returns is privately observed by banks, which offer deposit contracts, with a promised return at t = 1, the...

This paper offers a dynamic model of opaque over-the-counter markets. A seller searches for an attractive price by visiting multiple buyers, one at a time. The buyers do not observe contacts, quotes, or trades elsewhere in the market. A repeat contact with a buyer reveals the seller's reduced...

We analyze how, in the absence of capital market incentives, the influence of existing competition on voluntary disclosure is an evolving process which has a non-monotonic design. The progressive capability of rivals to forecast significant information and the increasing losses of abnormal...

This paper studies how division managers' access to venture capital (VC) markets affects the internal capital allocation decision of a multi-division firm. Division managers may leave firms and seek venture financing if their project ideas are not funded by headquarters. A successful new venture...

This paper analyzes a common-value, first-price auction with state-dependent participation. The number of bidders, which is unobservable to them, depends on the true value. For participation patterns with many bidders in each state, the bidding equilibrium may be of a "pooling" type - with high...

Financiers in early-stage entrepreneurial finance are known for their "spray-and-pray" approach, where they fund multiple start-ups expecting profits on a few to compensate losses on a lot of failed ones. We develop a theoretical framework in which financiers compete to fund entrepreneurs in an...