We propose a framework that advances our understanding of CEO retention decisions in misreporting firms. Consistent with economic intuition, outside directors are more likely to fire (retain) CEOs when retention (replacement) costs are high relative to replacement (retention) costs. When the...

We provide evidence that outside directors’ trading and ratification decisions are incrementally useful in assessing their independence. Because crises test the independence of boards, we first investigate the CEO replacement decision in firms caught intentionally misreporting earnings. We...

We consider a monopolist selling durable goods to consumers with unit demands but different preferences for quality. The seller can offer items of different quality at the same time to induce buyers to self-select, as in Mussa-Rosen (1978), but is not artificially constrained to offer only one...

The authors explain why buyers in the housing market use an agent employed by the seller. Such agents reduce buyers' search costs so that more buyers search a particular house. This increases the probability of the sale of the house and possibly also its selling price. However, since the selling...

The authors study the impact of voluntary trade by the manager. They find that, in contrast to standard signaling models, an action is good news for some firms and bad news for others, depending on observable characteristics of the firm, its managers, and their compensation plans. Further,...