We consider an economy in which a lender finances his loans to borrowers by issuing a securitized product to investors, and where the credit quality of the product may depend on whether the lender screens the borrowers. In the presence of asymmetric information between the lender and the...

To resolve the IPO underpricing puzzle it is essential to analyze who knows what when during the issuing process. In Germany, broker-dealers make a market in IPOs during the subscription period. We examine these pre-issue prices and find that they are highly informative. They are closer to the...

This paper studies how comparing can be used to provide information in financial markets in the presence of a hidden characteristics problem.Although an investor cannot precisely estimate the future returns of an entrepreneur's projects, the investor can mitigate the asymmetric information...

The paper constructs a search-theoretic model of credit markets with a bilateral trading mechanism that enables the manageable introduction of asymmetric information. Borrowers´ success probabilities are unobservable to financiers, but the degree of risk in observable projects can be used as a...

When companies go public to gather financial resources, the stocks they sell in an initial public offering (IPO) tends to be underpriced, resulting in a substantial price jump on the first day of trading. Underpricing of IPO has attracted important researching efforts in the last time. The...

This paper studies how comparing can be used to provide information in financial markets in the presence of a hidden characteristics problem. Although an investor cannot precisely estimate the future returns of an entrepreneur’s projects, the investor can mitigate the asymmetric information...

This paper analyses the effect of bank relationships on the interest rate and personaland real guarantees borne by a sample of small and medium-sized enterprises in theirindebtedness. The results of this paper indicate that the SMEs that work with fewer financialintermediaries obtain debt at a...