This paper models the interactions among technological innovation, product market competition and information leakage via the stock market. There are two firms who compete in a product market and have an opportunity to invest in a risky technology either early on as a leader or later once stock...

This paper models the interactions among technological innovation, product market competition and information leakage via the stock market. There are two firms who compete in a product market and have an opportunity to invest in a risky technology either early on as a leader or later once stock...

Are celebrity endorsements worthwhile investments in advertising‘ To answer this question we analyze a unique sample of 101 announcements made between 1996 and 2008 by firms listed in the US. Internet is the main medium of communication for these announcements. We employ event study...

Knowledge spillover often influences firms' innovation decisions and consequently the technological advance of an industry. Spillover may be caused by involuntary or strategic disclosures of firms' intermediary R&D progress, it can also occur due to the feedback from stock prices to decisions...

This paper studies how a banking supervisor should design a bank stress test. The test directly provides public information about a bank's stress resilience, which is a noisy indicator of the bank's true capitalization level. Moreover, the test result affects incentives for information...

This note demonstrates how performance measure congruity and noise determine an agency’s total surplus within an linear agency framework with multiple tasks. It provides a decomposition of agency costs, leading back to a congruity index previously proposed in the literature. In addition,...

We develop a model to show that cartels that produce goods with lower durability are easier to sustain implicitly. This observation gen- erates the following results: 1) implicit cartels have an incentive to pro- duce goods with an inefficiently low level of durability; 2) a monopoly or explicit...

In this paper, a promotion tournament is considered, where, at the beginning of the tournament, it is unknown how long the tournament lasts. Further, the promotion decision is based on the assessments of a supervisor with imperfect recall. In line with psychological research, the supervisor is...