This paper studies the implications of trading frictions in financial markets for firms' investment and dividend choices and their aggregate consequences. When equity shares trade in frictional asset markets, the firm's problem is time-inconsistent, and it is as if it faces quasi-hyperbolic...

Many economic activities are organized as partnerships. These ventures are formed with capital contributions by partnership members who obtain a share of ownership in exchange. The design of the partnership dictates how much of the profits is distributed among the members and how much is...

We study the roles private information and capital accumulation play in the structure of partnerships. Partnerships are ventures formed with capital contributions from two members who initially share ownership of a business. Each period, profit is either invested or paid to the partners...

Private information may limit insurance possibilities when two agents get together to pool idiosyncratic risk. However, if there is capital accumulation, bilateral insurance possibilities may improve because misreporting distorts investment. We show that if one of the Pareto weights is...