This paper examines the link between capital market governance (CMG) and several key measures of market performance. Using detailed data from individual stock exchanges, we develop a composite CMG index that captures three dimensions of security laws: the degree of earnings opacity, the...

We study delegated portfolio management when the manager´s ability to short-sell is restricted.Contrary to previous results, we show that under moral hazard, linear performance-adjusted contracts do provide portfolio managers with incentives to gather information.We find that the risk-averse...

In this paper we explore the influence of the possibility to short stocks and/or borrow money in laboratory markets. A key innovation of our study is that subjects can simultaneously trade two risky assets on two double-auction markets, allowing us to differentiate between assets with relatively...

Pragmatic-world nominal riskless rates are non-negative. However, conventional arbitrage theory has yet to develop a theoretical justification of this phenomenon. – We define the null-alternative cash as an investor holding onto cash and refraining from investment and consumption ("doing...

Pragmatic-world nominal riskless rates are non-negative. However, conventional arbitrage theory has yet to develop a theoretical justification of this phenomenon. – We define the null-alternative cash as an investor holding onto cash and refraining from investment and consumption ("doing...

In this paper we study delegated portfolio management when the manager's ability to short-sell is restricted. Contrary to previous results, we show that under moral hazard, linear performance-adjusted contracts do provide portfolio managers with incentives to gather information. The risk-averse...