Commitment to Overinvest and Price Informativeness
نویسندگان
چکیده
منابع مشابه
Commitment to Overinvest and Price Informativeness ∗ PRELIMINARY DRAFT
A fundamental role of financial markets is to gather information on firms’ investment opportunities, and so help guide investment decisions in the real sector. We argue in this paper that firms’ overinvestment is sometimes necessary to induce speculators in financial markets to produce information. If firms always cancel planned investments following poor stock market response, the value of the...
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A fundamental role of financial markets is to gather information on firms’ investment opportunities, and so help guide investment decisions in the real sector. In this paper we study the incentives for information production when prices perform this allocational role. We argue that firms’ overinvestment is sometimes necessary to induce speculators in financial markets to produce information. If...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2006
ISSN: 1556-5068
DOI: 10.2139/ssrn.846245