The book-building procedure for selling initial public offerings to investors hascaptured significant market share from auction alternatives in recent years, despite significantly lower costs in both direct fees and initial underpricing when using the auction mechanism. This paper shows that in the French market, where the frequency of book-building and auctions was about equal in the 1990s, the...
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In: Revue d'économie financière, 2005, vol. 79, p. 221-227
We analyze financial analysts’ activities and their added value, the pressures on analyst independence, and the 2002 Global Agreement in the U.S. and its impact on independent financial analysis. Financial analysts are potentially confronted with many pressures on their independence. These pressures are inherent to the multiplicity of their activities, and are not necessarily due to conflicts...
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In: Journal of Financial Economics, 2004, vol. 71, p. 169-210
In 1997, France Telecom went through a partial privatization. Using a database that tracks over 200,000 eligible participants, we analyze employees' decisions whether to participate; how much to invest; and what stock alternatives to select. The results are broadly consistent with our neoclassical model. We report four anomalous findings: (1) The firm specificity of human capital has a negligible...
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In: Journal of Risk and Uncertainty, 2004, vol. 28, p. 195-228
We analyze the risk level chosen by agents who have private information regarding their quality. We show that even risk-neutral agents will choose risk strategically to enhance their reputation in the market, and that such choices will be influenced by the mix of other agents’ types. Assuming that the market has no strong prior about whether the agents are good or bad, good agents will choose...
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