In this exercise, we attempt to develop an institutional quality investment cum trading strategy with small and retail investor in mind. Apart from lack of professional expertise and smaller investible amounts, individual investors also face limitations in their ability to taking short...

We analyze how voluntary disclosure of information by bidders affects the outcome of optimally designed auctions. In a single-object auction environment, we assume that before the revenue-maximizing auctioneer designs the auction, bidders noncooperatively choose signal structures that disclose...

We analyze the real option signaling game models of debt financing of a risky project under information asymmetry, where the firm quality is only known to the firm management but not outsiders. The firm decides on the optimal investment timing of the risky project that requires upfront fixed...

Nonlinear classification models can predict future earnings surprises with a high accuracy by using pricing and earnings input data. Surprises of 15% or more can be predicted with 71% accuracy. These predictions can be used to form profitable trading strategies. Additional variables have been...

Many companies regularly disclose non-GAAP performance measures to communicate firm-specific information that does not fit within the mold of GAAP reporting. However, these non-GAAP measures may have low information content or even be misleading to investors. Thus, some question whether auditors...

Due to the well-known efficiency--rent extraction trade-off, the optimal mechanism in a pure screening environment (e.g., revenue maximization in auctions or cost minimization in procurement) typically calls for distortions in allocative efficiency when agents possess private information at the...

We consider a setting where agents in a social network take binary actions, which exhibit local strategic complementarities. The agents are a priori uninformed about an underlying payoff-relevant state. An information designer wants to maximize the expected number of agents who take action 1,...

This paper analyzes a bilateral trade model where the buyer's valuation for the object is uncertain and she can privately purchase any signal about her valuation. The seller makes a take-it-or-leave-it offer to the buyer. The cost of a signal is smooth and increasing in informativeness. We...

Prior research shows that SEC comment letters provide useful information to outsiders of the firm. However, whether insiders such as boards of directors use SEC comment letters for the purpose of internal performance evaluation has not been studied. We find that firms reduce CEO annual bonuses...