The first empirical analysis of Zions Bancorporation's 2006 and 2007 auctions of Employee Stock Option Appreciation Rights Securities (ESOARS), this study examined (1) the impact of auction rules on bidding strategies and allocations, (2) the efficiency of the auction clearing prices, and (3)...

It is widely believed that contrary to standard asset allocation theory, employees irrationally hold concentrated investments in company stock in their 401(k) plans thus bearing firm-specific risk that could otherwise have been diversified away (see e.g., Benartzi, 2001). However, in measuring...