We examine the link between the scarcity of arbitrage capital and investors’ response to firms’ earnings information. The cost of financing levered investment strategies (i.e., investing with b…
We examine the relation between public pension plan chief investment officer (CIO) compensation and plans’ investment performance. Higher paid CIOs outperform their counterparts by 47–60 basis …
We examine whether rating agencies act defensively toward issuers with a higher likelihood of default. We find that agencies’ qualitative soft rating adjustments are more accurate as issuers’ d…
This paper examines the attention effect in the options market. We show that option investors (especially retail investors) buy more calls and puts on both daily winner and loser stocks, and this b…
Based on an online experiment with a sample of finance professionals and participants from the general population (acting as clients), we examine drivers and motives of clients’ choices to delega…
We examine which categories of option trading volume carry information about future stock prices around corporate news announcements. We predict and find that purchases of options are informative o…
Analysts’ street earnings forecasts are sometimes based on GAAP earnings and sometimes based on non-GAAP earnings, which exclude various GAAP earnings components. Therefore, differences in analys…
This study develops and tests a simple model of voluntary disclosure in which managers can choose to withhold (i.e., redact) certain elements from mandatory disclosure. We consider a setting in whi…
We examine the impact of product market competition on innovation in markets for technology. An innovator makes an investment in quality-improving innovation that can be licensed to one (targeted l…
We analyze how changes in the market structure of one industry—airlines—affect the performance of firms in a complementary industry—hotels—using an instrumental variables strategy to accoun…