Competition between investment banks for lead underwriter mandates in IPOs is fierce, but having committed to a particular bank, the power of the issuer is greatly reduced. Although information revelation theories justify giving the underwriters influence over pricing and allocation, this...

Financial markets provide for trade in information because money is just a means of scorekeeping, a way of tallying the relative purchasing power of individuals and organizations. It can be a physical tally such as a coin made from rare metals or a paper claim on a government or other reputable...

This paper considers the issue of disclosure of hedging choices. It is shown that disclosure is the preferred choice of both managers and shareholders if it removes completely the informational asymmetry among the manager and the shareholders concerning the business opportunities and risks faced...

We analyse a general equilibrium model in which there is both adverse selection of and moral hazard by banks. The regulator has several tools at her disposal to combat these problems. She can audit banks to learn their type prior to giving them a licence, she can audit them ex post to learn the...

In a recent paper we have introduced the class of realised kernel estimators of the increments of quadratic variation in the presence of noise. We showed that this estimator is consistent and derived its limit distribution under various assumptions on the kernel weights. In this paper we extend...

We develop a model in which cash-constrained entrepreneurs seeks a venture capitalist (VC) to finance a new firm. Costly monitoring is employed by VCs to reduce entrepreneurial moral hazard. When monitoring reveals poor performance, VCs want to punish the entrepreneur with liquidation. However,...

This paper models limit order books where each trader is uncertain of the underlying distribution in the asset's value to others. If this uncertainty is rapidly resolved, fleeting limit orders are submitted and quickly cancelled. This enhances liquidity supply, but leaves intact established...

This paper develops and experimentally implements a simple multi-negotiation bargaining game, in which one agent, called the “developer,†must reach agreements with a series of other agents, called “landowners,†in order to implement a valueincreasing project. The game has a...

This paper explores the business cycle implications of financial distress and bankruptcy law. We find that due to the presence of financial imperfections the effect of liquidations on the price of capital goods can generate endogenous fluctuations. We show that a law reform that...

In this paper we address the question as to why fund managers may trade on short-term information in a financial market that offers more profitable trading on long-term information. We consider a setting in which a fund manager’s ability is unknown and an investor uses performance...