This article compares the predictions of finite-shareholder models of conditional and unconditional takeover offers with the outcomes of laboratory experiments. In addition to differentiating between types of offers, the experimental designs span small and large firms as well as different levels of offer premiums. It is found that in unconditional offers to large groups of subjects (28–40), the symmetric Nash equilibrium predicts observed tendering frequencies quite accurately. For other experimental designs, the results are mixed. The analysis of shareholder tendering strategies from the experiment yields insights into (i) the effects of takeover offer designs, (ii) the appropriateness of finite-shareholder models for research, and (iii) the costs of free riding when shareholders are nonatomistic.

Von Neumann-Morgenstern preferences over terminal consumption can be inferred from wealth on a single sample path when markets are complete and returns follow a known law in a neoclassical investment problem in either a discrete-time i.i.d. binomial model or a continuous-time diffusion model with a Gaussian state variable. Numerical results suggest that useful information about preferences can be obtained from even a single noisy sample of monthly observations of a portfolio over 5 years.

This paper develops asymptotic distribution theory for instrumental variable regression when the partial correlation between the instruments and a single included endogenous variable is weak, here modeled as local to zero. Asymptotic representations are provided for various instrumental variable statistics, including the two-stage least squares (TSLS) and limited information maximum- likelihood (LIML) estimators and their t-statistics. The asymptotic distributions are found to provide good approximations to sampling distributions with just 20 observations per instrument. Even in large samples, TSLS can be badly biased, but LIML is, in many cases, approximately median unbiased. The theory suggests concrete quantitative guidelines for applied work. These guidelines help to interpret Angrist and Krueger's (1991) estimates of the returns to education: whereas TSLS estimates with many instruments approach the OLS estimate of 6%, the more reliable LIML and TSLS estimates with fewer instruments fall between 8% and 10%, with a typical confidence interval of (6%, 14%).

[This paper analyzes seven mandated disclosures contained in Management Discussion and Analysis (MD&A) to assess their information content. Generally, the results show that certain MD&A disclosures, particularly the discussions of future operations and planned capital expenditures, are associated with future (short-term) performance measures and investment decisions, after controlling for information contained in financial-statement-based ratios. However, the associations with longer-term results are generally not significant. The study illustrates that, in conjunction with the financial statements, the MD&A disclosures, especially prospective disclosures, can assist in assessing firms' future (short-term) prospects.]

This paper analyzes seven mandated disclosures contained in Management Discussion and Analysis (MD&A) to assess their information content. Generally, the results show that certain MD&A disclosures, particularly the discussions of future operations and planned capital expenditures, are associated with future (short-term) performance measures and investment decisions, after control- ling for information contained in financial-statement-based ratios. However, the associations with longer-term results are generally not significant. The study illustrates that, in conjunction with the financial statements, the MD&A disclosures, especially prospective disclosures, can assist in assessing firms' future (short-term) prospects.

Going public typically leads to a separation of managerial control and stock ownership, and potentially worsens managerial incentives. We document that the median ownership stake of officers and directors declines significantly from the year before going public to ten years later. Median operating return on assets also declines from the year before the offering to the end of the first year of public trading, but performance declines no further in ten years. In general, operating performance both within one year of the offering and during the first ten years of public trading is unrelated to ownership of officers and directors.

Our review of the evidence suggests that the claims of the advocates of standards and examination based reform of American secondary education may be right. The countries and Canadian provinces with such systems outperform other countries at comparable levels of development. In addition, New York State, the only state with a CBEEE, does remarkably well on the SAT test when student demography is held constant (Bishop 1996). CBEEEs are not, however, the most important determinant of achievement levels. CBEEEs are common in developing nations where achievement levels are often quite low [eg. Columbia and Iran]. Belgium, by contrast, has a top quality education system without having a CBEEE. More research on the effects of CBEEEs is clearly in order.

The last two decades have witnessed a tremendous growth in the volume of assets and liabilities whose cash flows depend, in a variety of ways, on the path of interest rates. Some of these, including floating-rate notes and swap agreements, contractually base cash flows on current and past interest rates and contain caps, floors, and other, more complex features. Others, including mortgages, many corporate bonds, and time deposits, are fixed-rate instruments that contain embedded options, such as those to prepay, call, or withdrawal. The irregular exercise of these options causes cash flows to vary as time proceeds and interest rates rise or fall. This paper develops a state-contingent claims technique for valuing such securities. It is derived from the option-based model of Breeden and Litzenberger (1978) using the transition matrix approach of Banz and Miller (1978). Particular attention is paid to valuing so-called path-dependent securities whose contemporaneous cash flows depend on the historical path of interest rates as well as their current level. A detailed example is provided in which an adjustable-rate mortgage is valued under a variety of economic and security specific assumptions.