We study a standard consumption based asset pricing model with rational investors who entertain subjective prior beliefs about price behavior. Optimal behavior then dictates that investors learn about price behavior from past price observations. We show that this imparts momentum and mean reversion into the equilibrium behavior of the price dividend ratio, similar to what can be observed in the...

In equilibrium, active investing must be compensated with returns from gathering costly information about stock values (e.g., Grossman and Stiglitz, 1980). In return, active investors serve to promote price discovery in stocks. However, substantial trading is required by active, informed investors, who may prefer to trade in the same stocks as passive, uninformed investors to hide their intenti...

Farming and food production sustainability increasingly depends on the availability of a clean energy model for irrigated agriculture. This can be achieved by massively introducing photovoltaic irrigation systems (PVI) with sufficient quality reliability. Nevertheless, such PVI projects require high upfront investment long payback times, so access to long-term, low-cost capital is essential ens...

Based on the Chinese IPO book building mechanism as the background, the paper chooses the market-oriented period (from November,2010 to April,2012) of the IPOs as the samples, and studies the relationship between the collusive behavior, institutional investors’ bidding behavior and underwriters’ pricing strategy(as well as the post-IPO performance). The results show that: Firstly, in the case o...

Mutual fund investors are largely middle class Americans2, many of whom are investing for essential long-term objectives like retirement and college education. For these individuals to make appropriate investment decisions, they must understand all dimensions of risk, including, perhaps most importantly, that risk and reward are closely related and that it may be necessary to assume certain “ri...

This paper explores optimal ways for a firm to sell its initial public offering (IPO) to a mix of informed and uninformed investors through an intermediary. I argue that uninformed investors provide a benchmark for informed investors, resulting in an endogenous constraint that affects the issuer’s revenue. I conclude that higher revenues are achieved with higher numbers of uninformed investors ...

Around the world, the tax laws are shaped by concerns with competitiveness. This paper provides a general theory of how taxes impact competitiveness. As part of that theory, this paper also introduces the concept of tax-based competitiveness neutrality. A tax system is competitively neutral when taxes do not cause competitors to change their relative valuations of any investments. This paper th...