This article develops a theory in which concentrated-trading patterns arise endogenously as
a result of the strategic behavior of liquidity traders and informed traders. Our results provide …

Firms’ inability to commit to future funding choices has profound consequences for capital
structure dynamics. With debt in place, shareholders pervasively resist leverage reductions no …

We develop a model in which a large investor has access to a costly monitoring technology
affecting securities' expected payoffs. Allocations of shares are determined through trading …

We analyze a model of voluntary disclosure by firms and the desirability of disclosure
regulation. In our model disclosure is costly, it has private and social value, and its precision is …

In a recent article in this Journal, Sumner (1981) took an ingenious approach to estimating
the level of monopoly power in the cigarette industry. He noted that differences in marginal …

A problem of screening agents with privately known forecasting abilities and reservation
utilities and then eliciting truthful information from these agents once they are employed is …

We derive a role for inside investors, such as venture capitalists, in resolving various agency
problems that arise in a multistage financial contracting problem. Absent an inside investor, …

We examine whether a large shareholder can alleviate conflicts of interest between managers
and shareholders through the credible threat of exit on the basis of private information. In …

In this article we examine theoretically the use of benchmark portfolios in the compensation
of privately informed portfolio managers. We find that the use of a benchmark, and …

We analyze a model where traders buy information from a monopolistic seller, which is
subsequently used in a speculative market. In order to overcome the dilution in the value of …