We consider the problem of maximizing portfolio value when an agent has a subjective view on asset value which differs from the traded market price. The agent's trades will have a price impact which affect the price at which the asset is traded. In addition to the agent's trades affecting the...

In many real-world settings, an action that affects the value of a product or service is self-reported rather than publicly observable. This, in turn introduces the possibility of misrepresentation. In this paper, we propose a theoretical model of self-reporting. A sender chooses an action and...

We present a theory of message legislation, legislative enactments not intended to alter policy but instead constructed to send a message to constituents. Using a formal model, we identify conditions under which legislators knowingly introduce non-viable legislation in order to signal their...

We introduce a class of two-player dynamic games to study the effectiveness of screening in a principal-agent problem. In every period, the principal chooses either to irreversibly stop the game or to continue, and the agent chooses an action if the principal chooses to continue. The agent's...

This study examines reactions of financial analysts to the disclosure of corporate fraud. We posit that analysts downgrade earnings forecasts of fraud firms after fraud disclosure to signal their quality and integrity. We explore how internal and external contingencies shape analysts'...

This paper aims to shed light on the long-standing debate on opportunistic and information perspectives of earnings management from a controlled laboratory experiment. Our results are in favor of the moral hazard explanation over the explanation based on the signaling motive. When we introduce a...

This paper explores how ambiguous signals and ambiguity aversion influence individuals' expectations and the pricing of asset in experimental financial markets. In line with the theory of Epstein and Schneider (2008) we find that subjects' degree of ambiguity aversion is positively correlated...

This paper develops a simple competitive search model to study illiquidity and partial retention of assets as signals of asset quality in markets with private information. I find that both signals are used in equilibrium. However, for sellers with high-quality assets, illiquidity is preferred...

Entrepreneurial business firms such as franchisors can enhance their network performance by attracting high-quality partners and preventing low-quality partners from joining the network. We draw on agency and transaction cost theories and the substantive literature on voluntary information...

The National Board for Professional Teaching Standards recognizes teachers who meet performance standards for “accomplished” educators. States and districts provide support for teachers to obtain this certification, which is considered an honor in the field. Using high school data from...