Due to limited attention, investors may react sluggishly to complex and implicit information, such as shocks transferred across fundamental linkages. We explore how efficiently China' s stock market incorporates fundamental linkage information into stock prices. Using shared analyst coverage as...

Using a proprietary data set of auto insurance claims from May 2014 to December 2016, this paper examines the influence of air pollution on the number and severity of traffic accidents in China. Combining an instrumental variable strategy with high-dimensional fixed effects, we find that air...

We develop a theoretical framework to analyze the relationship between jump risk management and firm value. By focusing on loss risk and insurance, we derive that insurance (or jump risk management) can significantly increase firm value. In addition, our work indicates that a firm would choose...

This article uses the Over-lapping Generation model to study individuals' optimal decision on consumption, insurance, investment, and education expenses. We first discuss the individuals' demand for insurance considering intergenerational transfer payments and education expenses. We show that...

In automobile insurance, the “contract timing effect” under Bonus-Malus System - there are fewer and fewer claims as time approaches to the end of a contract year - would bias the test of moral hazard. While the Expected Utility model cannot explain this phenomenon, we aim to unravel it by a...

Moral hazard is a critical issue in automobile insurance claiming behavior. However, empirical studies show that the "contract timing effect" - there are fewer and fewer claims as the time approaches to the end of each contract year - would bias the test of moral hazard under the Bonus-Malus...