This paper investigates the effects of risk sharing supplier relationships on the profitability and cost of capital of a new investment project. We compare the three possibilities of not investing in the project, bearing the project risk alone and sharing the risk with a supplier. We find that...

In a world of increasingly extensive information, rational investors can make better decisions. However, reinforcement-oriented investors are also more likely to observe preferred signals close to their own perception. A focus on these signals distorts the perceived aggregate signal in the...

We link equity and treasury bond markets via an informational channel. When macroeconomic state shifts are more probable, informed traders are more likely to have valid signals about fundamentals, so that uninformed traders are less willing to trade against informed ones. This implies low volume...