Discussion Papers

We study flows between investment funds and their effects on asset prices in a simple twoperiod version of Vayanos and Woolley (2010, VW). As in VW...

We propose a rational theory of momentum and reversal based on delegated portfolio management. Flows between investment funds are triggered by changes...

Banks operating under Value-at-Risk constraints give rise to a well-defined aggregate balance sheet capacity for the banking sector as a whole that...

We show that country characteristics explain most of the cross-sectional variation in bank board independence. In contrast, country characteristics...

This paper estimates the effect of corporate governance provisions on shareholder value and long-term outcomes in S&P1500 firms. We apply a regression...

This paper examines the relationship between executive cash compensation and company performance for a sample of large UK companies, focusing in...

Recent studies show that single-quarter institutional herding positively predicts short-term returns. Motivated by the theoretical herding literature...

We offer a rational expectations model of the dynamics of innovative industries. The fundamental value of innovations is uncertain and one must learn...

We propose a new continuous-time principal-agent model to study the optimal timing of stock-based incentives, when the effects of managerial actions...

We study the value of information in a competitive economy in which agents trade in asset markets to reallocate risk. We characterize the kinds of...

In a moral hazard setting with a performance additive in effort and a symmetrically distributed noise term, I show that compensation contracts which...

We investigate the effect of the ability of “non-traditional” funds to short-sell the equity of their debtors. This enables the funds to vote on the...

We examine whether a bidder can use tender o§er terms to signal post-takeover security benefits. Neither restricted bids nor cash-equity offers allow...

We survey theoretical developments in the literature on the limits of arbitrage. This literature investigates how costs faced by arbitrageurs can...

In this paper we develop a simple theoretical model to analyze the impact of institutional herding on asset prices. A growing empirical literature has...

In principle, credit rating agencies are supposed to be impartial observers that bridge the gap between private information of issuers and the...