Loading...
Please wait, while we are loading the content...
Similar Documents
Risk-Taking, Rent-Seeking, and Investment when Financial Markets are Noisy
| Content Provider | Semantic Scholar |
|---|---|
| Author | Albagli, Elías Hellwig, Christian Tsyvinski, Aleh |
| Copyright Year | 2014 |
| Abstract | We analyze investment and risk-taking by rms and identify a new distortion due to market imperfections and shareholder incentives. First we show that noisy information aggregation introduces a rent-shifting motive and leads to inecient investment. These ineciencies are particularly severe if upside risks are coupled with near constant returns to scale. Second we consider four applications of our model that give rise to excess leverage, negative welfare eects of transparency, excess sensitivity of investment to stock prices, and dynamically inconsistent rm |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://econweb.umd.edu/~davis/eventpapers/HellwigRisk.pdf |
| Alternate Webpage(s) | http://www.csef.it/IMG/pdf/hellwig.pdf |
| Alternate Webpage(s) | http://econ.as.nyu.edu/docs/IO/35371/Incentives07162014_CH.pdf |
| Alternate Webpage(s) | https://www.bde.es/f/webbde/INF/MenuHorizontal/SobreElBanco/Conferencias/2014/Archivos/1822_HELLWIG-Risk-Taking_Rent-Seeking_and_Investment.pdf |
| Alternate Webpage(s) | http://harrisdellas.net/conferences/hydra14/christian_Incentives07162014_CH.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
