Providing risk-sharing benefits to risk-averse policy holders is a primary function of insurance companies. We model that policy holders are paying a fee over the present value of indemnifications (i.e., technical provisions) to enjoy these risk-sharing benefits. Although the traditional...

We empirically study the forces that drive the primary and secondary portion of the shares placed in public during IPOs. Simultaneously, the results shed additional light on the motives for going public. The data show that the need for additional equity underlies primary and combined offerings....

We empirically study the forces that drive the primary and secondary portion of the shares placed in public during IPOs. Simultaneously, the results shed additional light on the motives for going public. The data show that the need for additional equity underlies primary and combined offerings....

With transactions costs for trading goods, the nominal exchange rate moves within a band around the nominal PPP value. We model the behavior of the band and of the exchange rate within the band. The model explains why there are below-unity slope coefficients in regression tests of PPP, and why...

There seems to be some confusion in the literature whether or not imperfections in the lending-borrowing market, and in particular, differences in lending and borrowing rates, would destroy shareholder unanimity. The purpose of this note is to show that imperfections in this market are not...