Despite their theoretical efficiency in selling shares to the public, auctions are not thepreferred mechanisms of issuers in Initial Public Offerings (IPOs). Chemmanur and Liu(2006) [WP] and Sherman (2005) [JFE 78, 615-649] provide a rational explanation for this“IPO auction puzzle”. They...

Portfolio choice is usually modelled by von Neumann-Morgenstern utility. Risk-value models are more general and permit the derivation of risk-value efficient frontiers. A behaviorally based risk measure with an endogenous or exogenous benchmark is used to derive efficient portfolios and to...