This paper investigates the price and volume behavior around buy, sell and holdrecommendations of Swiss stocks, as published in the major financial newspaper in Switzerland. This represents a random selection of recommendations which have been previously released by banks to their customers....

This paper presents a utility-based approach to value the borrower optimal behavior in presence of credit risk. The paper solves for the dynamic portfolio choices of a borrower. We thereby show that the presence of debt leads to a substantial modification in the borrower's behavior across states...

This paper introduces a framework for analyzing the role of financial factors as a source of instability in small open economies. Our basic model is a dynamic open economy model with a tradeable good produced with capital and a country-specific factor. We also assume that firms face credit...

Based on an experimental analysis of a simple monetary economy we argue that a monetary system is more stable than one would expect from individual rationality. Weshow that positive reciprocity stabilizes the monetary system, provided everyparticipant considers accepting money as a reasonable...

This paper contributes to the micro-foundation of money in centralizedmarkets with idiosyncratic uncertainty. It shows existence of stationarymonetary equilibria and ensures that there is an optimum quantity ofmoney. The rational solution of our model is compared with actual be-havior in a...

For decades economists have considered money illusion aslargely irrelevant. Here we show, however, that money illusion haspowerful effects on equilibrium selection. If we represent payoffs innominal terms almost all subjects play at or close to an inefficientequilibrium whereas if we lift the...

When information is costly, a seller may wish to prevent prospective buyers from acquiring information, for the cost of information acquisition is ultimately borne by the seller. A seller can achieve the desired prevention of information acquisition through posted-price selling, by offering...

We provide a direct estimate of the magnitude of agency costs in U.S. publicly-held firms. Using a sample of 1,307 firms in 1992-1997, we compute an explicit performance benchmark that compares a firm’s actual Tobin’s Q to the Q∗ of a hypothetical fully-efficient firm having the same...

The paper develope a models for evaluating the optimal hedging and trading strategies under default risk mitigation policies. It deals with an exchange traded derivative Instrument, i.e. future contracts but ures can succeed in locking the asset value, but they may create two additional risks...

Recent empirical work shows that a better legal environment leads to lowerexpected rates of return in an international cross-section of countries. Thispaper investigates whether differences in firm-specific corporate governancealso help to explain expected returns in a cross-section of firms...