Do informed shareholders who can influence corporate decisions improve governance? We demonstrate this may not be generally true in a model of takeovers. The model suggests that a shareholder's ability to collect information and trade ex post may cause him, ex ante, to support value-destroying...

Complex investments are investments that are difficult to value in the short-term. In this paper, we analyze the incentives of a manager who is compensated based on short-term stock prices to invest in complex long-term investments. In particular, we explore how the manager's investment decision...