DeAngelo and Roll (2015) observe that leverage cross-sections change significantly over even short periods. This finding is largely incompatible with existing models operating on the assumption that firms choose leverage levels in isolation. In this paper, we ask how executive networks might...

Prior literature identifies great similarity in executive compensation packages of firms and has succeeded in hypothesizing but not in substantiating the responsible channel or channels. We introduce dynamic stochastic network techniques to directly analyze the following three possible channels...

The principal result of APT is the arbitrage pricing condition that expected returns can be approximated by a linear combination of risk with strongly bounded pricing errors. Existing tests of APT either assume the pricing error to be zero or of order one in probability. Neither assumption is...

There have been many theoretical representations of learning in financial markets, but few empirical realizations. In this paper, we establish an empirical learning framework which emphasizes the ordering of history, the similarity of events, the importance of memory and the importance of...

This paper reexamines the event study methodology in finance. We consider a formal specification of an event study in terms of a system of abnormal returns and, in particular, emphasise the possible limitations of using a methodology when misspecification may be present. In the first section of...

The reputation of an individual is the aggregate opinion of them. Reputation is usually explained by attributes of the one reputed, not the motivation of those doing the reputing. In this paper, we develop a model of reputation where the opinions are assets that leverage the reputation of...