Deregulation provides a natural experiment for examining how governance adapts to structural changes in the business environment. We investigate the evolution of governance struture -- ownership concentration, compensation policy, and board composition -- in the U.S. airline industry during a 22...

We present a general equilibrium model where the Walrasian labor market is replaced by a setup in which unemployed workers search for employment opportunities.

In November 1987, USAir Group acquired Piedmont Aviation for $1.6 billion in cash tender offer. Following the acquisition of the two carriers, the new USAir incurred huge operating losses, became the last profitable major airline, sustained a large reduction in its stock price, eliminated its...

This paper presents a model in which agents are distinguished by their characteristics, exchange of goods requires communication between firms and their customers, and agents with similar characteristics communicate more effectively. This setup delivers a body of testable impliactions about the...

This paper studies contracts between brokers and investors when investors are heterogeneous and their types are non-contractible. We identify two novel features of the commission contract (in addition to the risk-sharing argument suggested in Brennan and Chordia 1993) wich help explain its...

We quantify the tax savibgs from hedging by modeling major provisions of the tax code. Using data from COMPUSTAT, we simulate likely tax savings from reducing the volatility of taxable income.

This paper suggests a general approach to testing dynamic models by approximating the true asset pricing kernel directly using orthonormal polynominals.

In this paper, we analyze the risks associated with derivative transactions, and the impact of regulation in limiting these risks. We provide a simple, parametric framework in which ine can analyze price, default and sustemic risk.

We examine incentives to manage accounting information within 63 property-liability insurance compagny conversions from mutual ownership to common stock charter.

Considerable research in accounting focuses on the role of accruals in capital market valuation and in contracting. The research shows accruals enable managers to improve on cash flows as a mesure of firm performance. However, since accruals provide managers with a means of managing...