This paper presents a model in which agents are distinguished by their characteristics, exchange of goods requires communication between firms and their customers, and agents with similar characteristics communicate more effectively. This setup delivers a body of testable impliactions about the...

This paper studies contracts between brokers and investors when investors are heterogeneous and their types are non-contractible. We identify two novel features of the commission contract (in addition to the risk-sharing argument suggested in Brennan and Chordia 1993) wich help explain its...

We examine incentives to manage accounting information within 63 property-liability insurance compagny conversions from mutual ownership to common stock charter.

Considerable research in accounting focuses on the role of accruals in capital market valuation and in contracting. The research shows accruals enable managers to improve on cash flows as a mesure of firm performance. However, since accruals provide managers with a means of managing...