We study optimal disclosure rules that alleviate inefficiencies caused by managerial private benefits. An entrepreneur raises capital from investors by designing a security and an associated covenant. The covenant allocates the control right of the project to the entrepreneur or investors in the...

We study asset recognition principles in terms of the level of uncertainty in the future benefits to such assets. From a real effects perspective, we establish that there is a threshold of uncertainty beyond which it is better to leave assets unmeasured and comingled with operating profits. We...

We study the optimal level of commonality of accounting standards when firms' investments exhibit beauty-contest features as in, e.g., Arya and Mittendorf (2016). We model more commonality of accounting standards as more correlated noises in firms' reports, consistent with the "more harmonized"...

We examine the effects of asymmetric disclosure of good and bad news on price We examine the effects of asymmetric disclosure of good vs. bad news on price informativeness when prices provide useful information to assist firms' investment decisions. We find that more timely disclosure of...