Privatization shifts residual income and control to private investors, restricting redistribution and improving incentives; thus rapid privatization should be desirable. Empirically, however, the transfer of ownership, as opposed to control, is very gradual. I offer an explanation based on investors' concern about future interference. A government averse to redistribution retains a passive stake in the firm; the willingness to bear residual risk signals commitment. When a large government stake conflicts with the transfer of control, underpricing may be necessary for separation. Finally, when the required discount is large, a committed government may prefer not to signal, gaining credibility over time.

This paper explores the evolutionary foundations of altruism among siblings and extends the biologists' kin-selection theory to a richer class of games between relatives. It shows that a population will resist invasion by dominant mutant genes if individuals maximize a "semi-Kantian" utility function in games with their siblings. It is shown that a population that resists invasion by dominant mutants may be invaded by recessive mutants. Conditions are found under which a population resists invasion by dominant and also by recessive mutants.

Regressions of multiple-period changes in the log exchange rate on the deviation of the log exchange rate from its "fundamental value," display evidence that long-horizon changes in log nominal exchange rates contain an economically significant predictable component. To account for small-sample bias and size distortion in asymptotic tests, inference is drawn from bootstrap distributions generated under the null hypothesis that the log exchange rate is unpredictable. The bias-adjusted slope coefficients and R^2's increase with the forecast horizon, and the out-of-sample point predictions generally outperform the driftless random walk at the longer horizons.

We analyze the determinants of replacement investment decisions in a contingent claims model with maintenance and operation cost uncertainty. We find that the optimal time between replacements is increasing in the volatility of cost, the purchase price of a new asset, and the corporate tax rate; and is decreasing in the systematic risk of cost, the salvage value of the asset, and the investment tax credit. The optimal time between replacements can either increase or decrease with an increase in the depreciation rate. Extensions of the model to examine the effects of technological and tax policy uncertainty on replacement investment decisions give intuitive, but striking results. Uncertainty about the arrival of a technological innovation that would decrease maintenance and operation cost results in a significant decrease in replacement investment. Uncertainty in a tax law change that would encourage investment decreases current investment; and uncertainty in a tax law change that would discourage investment increases current investment.

Messod D. Beneish, John C. Gardner, Information Costs and Liquidity Effects from Changes in the Dow Jones Industrial Average List, The Journal of Financial and Quantitative Analysis, Vol. 30, No. 1 (Mar., 1995), pp. 135-157