Capital budgeting frequently involves multiple stages at which firms can continue or abandon ongoing projects. In this paper, we study a project requiring two stages of investment. Failure to fund Stage 1 of the investment precludes investment in Stage 2, whereas failure to fund Stage 2 results...

In this paper we examine a setting where agents can form lobbying coalitions to influence a policy-maker. Policy uniformity causes agents to free ride on each other's lobbying and gives them an incentive to form lobbying coalitions. We investigate when coalitions are formed by similar or...

We investigate the relation between investor horizon and disclosure policy. We develop and analyze a rational expectations model where the original investors commit to a disclosure policy. Counter to casual intuition, short-horizon investors prefer more disclosure and are willing to bear costs...

This paper shows that improving financial efficiency may reduce real efficiency. While the former depends on the total amount of information available, the latter depends on the relative amounts of hard and soft information. Disclosing more hard information (e.g. earnings) increases total...

We consider a cheap talk setting with two senders and a continuum of receivers with heterogenous preferences. Receivers listen to just one sender, but can choose which sender to listen to. We determine that: (i) full communication is possible for a large set of sender preferences; (ii) both...

We examine the implications of interested intermediaries on corporate actions, stock prices, and investors' portfolio decisions. An interested intermediary is an asset manager who has private preferences over corporate actions, which could relate to corporate governance policies, social or...

In this paper, we consider the price effects of risk disclosure. We develop a model in which investors are uncertain about the variance of a firm's cash flows and the firm releases an imperfect signal regarding this variance. In our model, uncertainty over the riskiness of a firm's cash flows...