This paper examines how information becomes reflected in prices when investment decisions are delegated to fund managers whose tenure may be shorter than the time it takes for their private information to become public. We consider a sequence of managers, where each subsequent manager inherits...

Recent theoretical models show that irrational expectations can generate return predictability consistent with apparent violations of weak-form market efficiency documented in the empirical literature. These behavioral models constrain rational investors' ability toexploit inter-temporal...

This paper identifies a disadvantage to decision making in a team. We show that in some cases available information is lost due to sequential communication that results in informational cascades. Although incentive contracts exist that prevent cascades, in some cases these contracts do not...

This article analyzes whether political connections of the board of directors of publicly traded companies in the USA affect the allocation of government procurement contracts. It focuses on the change in control of both House and Senate following the 1994 election and finds that companies with...

This paper investigates how the presence of a large institutional shareholder affects the complexity of corporate investments. Our analysis is based on the observation that the blockholder’s planning horizon does not necessarily coincide with the time it takes for the market to correctly...

This article explores whether political connections are important in the United States. The article uses an original hand-collected data set on the political connections of board members of S&P 500 companies to sort companies into those connected to the Republican Party and those connected to...

When a firm forms a market closes. Resources that were previously allocated via the price system are allocated by managerial authority within the firm. We explore this choice of organizational form using a model of price formation in which agents negotiate prices on behalf of their principals...