This paper studies managerial decisions about investment in long-run projects in the presence of imperfect information (the market knows less about such investments than the firm's managers) and short-term managerial objectives (the managers are concerned about the short-term stock price as well...

This paper considers trading environments in which buyers are privately informed about their valuations and sellers are privately informed about the expected value of outside trading opportunities. Outside opportunities are stochastic, however, and future realized shocks may make bilateral trade...