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ANALYSIS and listened to the lamentations of countless numbers of colleagues concerning the rate at which the literature is expanding, the field of finance seems to cry out for a precious period of time, however brief it may be, to catch its breath. There appears to be little doubt that keeping up with new ideas, infused into the milieu which is finance, and reincarnated old ideas, clothed in a garb more fitting to the contemporary scene, is at best a most difficult task, especially with the increasing degree of specialization of previously neat and identifiable compartments.

Duffie (1996) examines the theoretical impact of repo “specials” on the prices of Treasury securities and concludes that, all else the same, an issue on special will carry a higher price than an otherwise identical issue. We examine this hypothesis and find strong evidence in support of it. We also examine whether the liquidity premium associated with “on-the-run” issues is due to repo specialness and find evidence of a distinct effect. Finally, we investigate whether auction tightness and percentage awarded to dealers are related to subsequent specialness and find that both variables àre generally significant.

Darrell Duffie (1996) examines the theoretical impact of repo 'specials' on the prices of Treasury securities and concludes that, all else the same, an issue on special will carry a higher price than an otherwise identical issue. The authors examine this hypothesis and find strong evidence in support of it. They also examine whether the liquidity premium associated with 'on-the-run' issues is due to repo specialness and find evidence of a distinct effect. Finally, the authors investigate whether auction tightness and percentage awarded to dealers are related to subsequent specialness and find that both variables are generally significant.

Duffie (1996) examines the theoretical impact of repo “specials” on the prices of Treasury securities and concludes that, all else the same, an issue on special will carry a higher price than an otherwise identical issue. We examine this hypothesis and find strong evidence in support of it. We also examine whether the liquidity premium associated with “on‐the‐run” issues is due to repo specialness and find evidence of a distinct effect. Finally, we investigate whether auction tightness and percentage awarded to dealers are related to subsequent specialness and find that both variables àre generally significant.

There is a natural separation between production decisions affecting the firm as a whole and individual decisions by each shareholder about his portfolio of securities. The end result of these two types of decisions is normally referred to as a productive exchange equilibrium. At such an equilibrium, no individual wants to adjust his portfolio and no firm can muster majority support for a change in its production plans. This paper presents a partial theory of takeover bids in that it examines the role of a takeover bid as a mechanism by which a simultaneous change in shareholdings and production plans can be achieved. This enables a new production exchange equilibrium to be reached which is preferred by a majority of the shareholders but which is inaccessible without a contingent contract in the form of a takeover bid.

There is a natural separation between production decisions affecting the firm as a whole and individual decisions by each shareholder about his portfolio of securities. The end result of these two types of decisions is normally referred to as a productive exchange equilibrium. At such an equilibrium, no individual wants to adjust his portfolio and no firm can muster majority support for a change in its production plans. This paper presents a partial theory of takeover bids in that it examines the role of a takeover bid as a mechanism by which a simultaneous change in shareholdings and production plans can be achieved. This enables a new production exchange equilibrium to be reached which is preferred by a majority of the shareholders but which is inaccessible without a contingent contract in the form of a takeover bid.

D. J. Ashton, D. R. Atkins, Interactions in Corporate Financing and Investment Decisions--Implications for Capital Budgeting: A Further Comment, The Journal of Finance, Vol. 33, No. 5 (Dec., 1978), pp. 1447-1453