In an asymmetric information framework, a number of authors have demonstrated the existence and uniqueness of short-term debt pooling equilibria in the absence of dissipative costs. We show that short-term debt pooling is robust to a broad range of deviations from stationarity and intertemporal...

The authors model the agency relationship between managers and investors. Through socialization, ethical managers develop internalized norms that prevent them from acting opportunistically. Unethical managers lack these norms. Higher ethical standards on the part of managers increase economic...

This article compares the predictions of finite-shareholder models of conditional and unconditional takeover offers with the outcomes of laboratory experiments. In addition to differentiating between types of offers, the experimental designs span small and large firms as well as different levels...

A firm must decide what security to sell to raise external capital to finance a profitable investment opportunity. There is ex ante asymmetry of information regarding the probability distribution of cashflow generated by the investment. In this setting, we derive necessary and sufficient...

Investigates futures market efficiency. Anomalies in asset prices; Test for fads in futures markets; Data description; Price effects; Trading rule tests; Volume effects.

We present an economic mechanism and supportive empirical evidence for the transmission of information between equity securities first documented by Lo and MacKinlay (1990). It is argued that the past returns on stocks held by informed institutional traders will be positively correlated with the...

This paper considers a problem in which an agent is hired to manage a capital investment and subsequently receives private information regarding the productivity of the capital investment. The capital manager must decide whether to invest capital supplied by the firm (the principal), or to...