We consider a model of external financing in which entrepreneurs are privately informed about the quality of their projects and seek funds from competitive financiers. The literature restricts attention to monotonic or ‘manipulation proof' securities and finds that straight debt is the unique...

We consider a model of competitive insurance markets involving both asymmetric information and ambiguity about the accident probability. We show that there can exist a full-insurance pooling equilibrium. We also present an example where an increase in ambiguity leads to a strict Pareto...

We consider a model of external financing in which privately informed entrepreneurs seek funds from competitive financiers. The literature restricts attention to monotonic securities and finds that straight debt is the uniquely optimal. Monotonicity is justified by the argument that it would...

This paper shows that insiders trade on public information just after earnings announcements. Using a sample of US stocks, we analyze insider trading in the context of short-selling activity and show that insiders sell significantly more often and more shares when short sellers are also highly...