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Adverse Selection, Capital Supply, and Venture Capital Allocation

Winegar, Adam - 2018

capital. Entrepreneurs have private information about their projects' quality and compete in a search market to attract … investors. The combination of low capital supply and information frictions can cause entrepreneurs with valuable projects to … avoid the venture capital market. An increase in capital supply reduces the distorting effects of search and information …

Persistent link: https://www.econbiz.de/10012933825

Taxing Capital Appreciation

Glogower, Ari D. - 2018

The realization rule — which defers tax on asset gains and losses until a disposition — is a well-known flaw in the income tax. Tax scholars have long recognized that the rule causes inequity, inefficiency, complexity, and revenue loss; allows wealthy taxpayers to avoid the income tax; and...

Persistent link: https://www.econbiz.de/10012933846

Multi-Horizon Forecast Comparison

Quaedvlieg, Rogier - 2018

We introduce tests for multi-horizon superior predictive ability. Rather than comparing forecasts of different models at multiple horizons individually, we propose to jointly consider all horizons within a forecast path. We define the concepts of uniform and average superior predictive ability....

Persistent link: https://www.econbiz.de/10012933849

Expectations, Networks, and Conventions

Golub, Benjamin - 2018

unified analysis of these objects and their limits, for general information structures, priors, and networks of counterparty …-informed: agents coordinating on the prior expectations of the one with the worst private information, despite all having nearly common …

Persistent link: https://www.econbiz.de/10012933854

Altruism and Egoism in Investment Decisions

Brodback, Daniel - 2018

We provide survey evidence that personal values have an impact on individual investment decisions, in particular the decision to invest socially responsible. Our findings show that there is a positive link between altruistic values and the relative importance of social responsibility. This...

Persistent link: https://www.econbiz.de/10012933856

Hybrid Macroeconomic and Microeconomic Goals

Mert, Merter - 2018

This study assumes that a regulative authority imposes hybrid goal functions to the economy. Then, firms' behavior and economic growth occur with the help of that function. In the light of this assumption, the first aim of this paper is to show that a firm's objective function cannot be only...

Persistent link: https://www.econbiz.de/10012933858

A Positive Theory of Accounting-Based Management by Exception

Penno, Mark - 2018

Management by exception (MBE) is widely used to allocate scarce managerial expertise on the basis of exception reports. I model MBE as a rule that triggers a management intervention if-and-only-if given thresholds are not met. While the resulting MBE rule economizes on valuable expertise, its...

Persistent link: https://www.econbiz.de/10012933863

Incentive Pay and Systemic Risk

Albuquerque, Rui A. - 2018

We show that, in the presence of correlated investment opportunities across firms, risk sharing between firm shareholders and firm managers leads to compensation contracts that include relative performance evaluation. These contracts bias investment choices towards correlated investment...

Persistent link: https://www.econbiz.de/10012933865

Cyclicality in Aggregate Earnings and the Market Risk Premium

Yoshinaga, Yuto - 2018

aggregate earnings conveys information on a future decline (increase) in financial performance. Third, unlike changes in the …

Persistent link: https://www.econbiz.de/10012933866

Business Groups with Banks : Investment Efficiency and Tunneling

Brown, Craig - 2018

We examine the role of a bank within a business group consisting of favored firms with greater owner rights, and disadvantaged firms with fewer owner rights. Our results suggest that a bank allows a family owner to tunnel wealth by offering high-yield subordinated debt to favored firms,...

Persistent link: https://www.econbiz.de/10012933868