We look for necessary properties of shareholder-value maximizing corporate boards when shareholders face a trade-off between improving information sharing between the board and management and reducing distortions in decision-making arising out of managerial agency. We draw a distinction between...

We investigate the security design problem in an initial public offering (IPO). In line with Rock~(1986), we consider a situation in which some investors are better informed than others about the prospects of the firm, resulting in a winner's curse problem. To raise capital, the owners of the...

In asymmetric information models of financial markets prices (imperfectly) reveal private information held by traders. Informed insiders thus have an incentive not only to trade less aggressively but also to trade in the quot;wrongquot; direction so as to quot;confusequot; the market and...

We construct a model of trading in a financial market with an insider who may or may not be informed about the fundamentals. Rational traders called followers possess part of the private information of the insider (which the market makers do not possess) and trade on this information. This...

We characterize optimal corporate boards when shareholders face a trade-off between improving information sharing between the board and management and reducing distortions in decision making arising out of managerial agency. We show that allocating authority to management is suboptimal....

We analyze the problem of dilution leading to inefficient underinvestment caused by the adverse selection problem. We assume that the market obtains information about the firm over time, but that at each date the manger possesses better information about firm prospects than does the market. We...