We develop a dynamic model of investment, cash holdings, financing, and risk management policies in which firms face financing frictions and are subject to permanent and temporary cash ow shocks. In this model, target cash holdings depend on the long-term prospects of the firm, implying that the...

We conduct a series of experiments that simulate trading in financial markets and which allows us to identify the different effects that subjects’ risk attitudes and belief updating rules have on the information content of the order flow. We find that there are very few risk-neutral subjects...

This article examines how firms facing volatile input prices and holding some degree of market power in their product market link their risk management and production or pricing strategies. This issue is relevant in many industries ranging from manufacturing to energy retailing, where risk...

This article examines how …rms facing volatile input prices and holding some degree of market power in their product market link their risk management and their production or pricing strategies. This issue is relevant in many industries ranging from manufacturing to energy retailing, where risk...

We study the dynamics of an innovative industry when agents learn about the likelihood of negative shocks. Managers can exert risk-prevention effort to mitigate the consequences of shocks. If no shock occurs, confidence improves, attracting managers to the innovative sector. But, when condence...

Using an exhaustive database on academic publications in mathematics, we study the patterns of productivity by world mathematicians over the period 1984-2006. We uncover some surprising facts, such as the absence of age related decline in productivity and the relative symmetry of international...

This research was conducted within the Paul Woolley Research Initiative on Capital Market Dysfunctionalities at IDEI, Toulouse. Support from the Europlace Institute of Finance is gratefully aknowledged. Many thanks to participants in the first conference of the Centre for the Study of Capital...

Using an exhaustive database on academic publications in mathematics, we study the patterns of productivity by world mathematicians over the period 1984-2006. We uncover some surprising facts, such as the absence of age related decline in productivity and the relative symmetry of international...

Speculative industries exploit novel technologies subject to two risks. First, there is uncertainty about the fundamental value of the innovation: is it strong or fragile? Second, it is difficult to monitor managers, which creates moral hazard. Because of moral hazard, managers earn agency rents...