Two means by which commodity producers can reduce their exposure to quantity risk are share contracting and futures hedging. This paper explains the coexistence of these arrangements by showing that these will normally be complementary means of transferring risk. Share contracting by a purchaser...

This paper models the maintenance of management quality through the simultaneous functioning of internal and external corporate control mechanisms - board dismissals and takeovers. We examine how the information sets of the board and the acquiror are noisily aggregated, and how this affects the...

This essay addresses some salient issues associated with corporate control. First, what determines the distribution of insider and outsider share ownership in the firm, and how does this distribution affect corporate performance? Second, how effective are board dismissals, proxy fights and...

We show that the incentive for managers to build their reputations distorts firms' investment policies in favor of relatively safe projects, thereby aligning managers' interests with those of bond-holders, even though managers are hired and fired by shareholders. This effect opposes the familiar...

Optimal futures hedging and equilibrium futures price bias are examined in a model characterized by two consumption goods, one of which has stochastically varying output, and where information arrives sequentially. Positive (negative) complementarity in consumer preferences promotes downward...

Optimal futures hedging is examined in a two-good model with stochastic output and sequential information arrival. A producer's optimal hedge depends on demand elasticity, sensitivity of his output to weather, his correlation with aggregate output, and how rapidly his output uncertainty is...

This paper presents a model of tender offers in which the bid perfectly reveals the bidder's private information about the size of the value improvement that can be generated by a takeover. We argue that bidders with greater improvements will offer higher premia to ensure that sufficient shares...

This paper examines the determinants of commodity futures hedging and of risk premia arising from covariation of the futures price with stock market returns, and with the revenues of producers. Owing to supply shocks that stochastically redistribute real wealth (surplus) between producers and...

We present a model of corporate acquisitions in which initially uninformed bidders must incur costs to learn their (independent) valuations of a potential takeover target. The first bidder makes either a preemptive bid that will deter the second bidder from investigating or a lower bid that will...