We analyze ways in which heterogeneity in responsiveness to incentives (drive) affects employees' incentives and firms' incentive systems in a career concerns model. On the one hand, since more driven agents work harder in response to existing incentives than less driven ones - and therefore pay...

This paper presents a model of financial reporting in which investors infer both pre-managed earnings and the precision of earnings from reported earnings. Over-reporting earnings has two opposing pricing effects: investors infer higher pre-managed earnings from an inflated positive earnings...

Agency mortgage backed securities (MBS) with diverse characteristics are traded in parallel with individualized contracts in the specified pool (SP) market and with standardized contracts in the to-be-announced (TBA) market. We find that this unique parallel trading environment significantly...