As an effective investment strategy, investors often invest jointly in a company by forming a syndicate. The unique feature of this paper is that it endogenizes the formation of an investment syndicate. We provide a theory on the endogenous formation of networks in investment syndication and...

Investors often behave in puzzling ways. In this paper, we develop a theory that implies “unusual” investor behaviors in a market equilibrium with heterogeneous investors who formulate their investment strategies based on their individual assessments of market signals, where market signals...