We analyze the optimal financing of investment projects when managers must exert unobservable effort and can also switch to less profitable riskier ventures. Optimal financial contracts can be implemented by a combination of debt and equity when the risk-shifting problem is the most severe while...

As a centralized, computerized, limit order market, the Paris Bourse is particularly appropriate for studying the interaction between the order book and order flow. Descriptive methods capture the richness of the data and distinctive aspects of the market structure. Order flow is concentrated...

This paper compares centralized.and fragmented markets, such as floor and telephone markets. Risk-averse agents compete for one market order. In centralized markets, these agents a re market makers or limit order traders. They are assumed to observe th e quotes of their competitors. In...