This paper considers lending to finance projects in a setting where repayment enforcement appears impossible. The loan was illegal and thus legally unenforceable. Creditors were incapable of applying private coercion to force repayment. Borrowers lacked both collateral and reputation capital....

Prior literature examines the matching of firm-types with board composition, but very little research focuses on the matching of CEO types with directors' skill sets. We examine whether a gender-diverse board helps to mitigate the negative impacts of overconfident managers, thus improving firm...

We show that managerial learning from stock prices can lead to feedback loop vulnerability: liquidity-induced trading can impose a negative externality on the firm's investment decisions, inducing liquidity unconstrained investors to sell their stock holdings. Interestingly, overconfident...

Are overconfident executives more likely to be promoted to CEOs? Using an option-based overconfidence measure, we show that firms with overconfident executives tend to hire internally. Further, when firms hire internally, they are more likely to pick a more confident candidate. The results...

Overconfident CEOs often ‘overinvest’ in R&D and capital expenditure. But, could there be a silver lining this such investment? We hypothesize that such investment can improve workplace safety. Firms with overconfident CEOs experience significantly fewer industrial accidents. This effect is...