Overview and Reading List (by week)

1) Game Theory Concepts and Micro Tools

Static Games (brief review, some examples from Osborne and Rubenstein)

Milgrom et. al (1983) JME --mixed strategies in auction bidding

Optimization, Implicit Function Theorem, Comparative Statics and Maple

Dynamic Games, Imperfect Information, Equilibrium Refinements

2) Models of Information Asymmetry

Leland and Pyle (1977) JF – equity retention

Gale and Stiglitz (1989) JF – Leland and Pyle with aftermarket

Courteau (1995) JFQA – nests both of above

Grinblatt and Huang (1989) – equity retention plus pricing issues

3) Models of Information Asymmetry (cont.)

Myers and Majluf (1984)

Narayanan (1988) JFQA – Myers and Majluf cont.

Brennan and Kraus (1987) JF -- richer set of financing options

Constantinides and Grundy (1989) RFS – richer set of financing options

Stiglitz and Weiss (1981) AER – credit rationing

4) Models of Moral Hazard

Myers (1977) JFE -- underinvestment

Gale and Hellwig (1985) RESTUD – costly state verification and debt optimality

Diamond (1984) RESTUD – above with endogenous bankruptcy costs

Jensen and Meckling (1976) JFE – asset substitution

Gavish and Kalay (1983) JFQA – asset substitution

5) Event Studies and Applications to Signaling Models

Brown and Warner (1980) JFE

Brown and Warner (1985) JFE

Asquith and Mullins (1986) JFE -- evidence on pecking order

Diamond (1991) QJE – debt maturity

Barclay and Smith (1995) JF – evidence on debt signaling models

Guedes and Opler (1996) JF – ditto

Jung, Kim and Stulz JF Equity Issues and Timing

Bayless and Chaplinsky (1996) JF – windows of financing opportunity?

Shyam-Sunder – debt event study

6) Banks vs. Other Debt Sources

James (1987) JFE – bank loans vs. other types of debt

Chemmanur and Fulghieri (1994) RFS – reputation and funding source

Hauswald and Marquez (2003) RFS – information technology

Rajan and Peterson QJE (1995) – banking competition

Student Paper Presentation 1 & 2

7) Banks vs. Stock Markets, Governance Issues

Black and Gilson (1997) JFE -- banks vs. stock markets

Holmstrom and Tirole (1993) JPE – incentives and stock market liquidity

Murphy (1998) – compensation survey paper

Zingales (1994) – voting rights

La Porta et. al (1997) JF and 1998 JPE – int’l governance comparisons

Grossman and Hart (1980) BELL – corp. charters, segues to M&A

8) Mergers and Acquisitions

Kyle and Vila (1991) – takeover theory

Shleifer and Vishny (1986) – takeover theory

Jensen and Ruback (1983) JFE – empirical survey paper

Jarrell, Brickley and Netter (1990) JEP – empirical survey paper

Gilson (2000) – takeover defense law

Amihud and Lev (1981) Bell Journal -- on risk-reduction as a motive

Morck, Shleifer and Vishny (1990) JF – managerial incentives

Seyhun (1990) – managerial incentives

Harrod (2004) JFE – merger waves

9) Restructuring

Halpern, Kieschnick and Rotenberg (1999) -- LBOs

Krishnaswami and Subrmaniam (1999) – spin-offs

Allen and McConnell (1998) -- carve-outs

Lang, Poulsen and Stulz (1995) – asset sales

Slovin, Sushka, Ferraro (1995) – a novel test involving all of the above

Berger and Ofek (1995) – corporate diversification

Students Paper Presenations 3, 4 & 5

10) Equity Pricing

Michaely and Shaw (1994) RFS tests competing underpricing theories

Muscarella and Vetsupens (1989) JFE a novel test of underpricing theories

Hanley (1993) partial adjustment phenomenon

Student Paper Presentation 6 &7

11) IPO Aftermarket Patterns

Chowdry and Nanda JFQA -- Price support (theory)

Benveniste, Busaba and Wilhelm -- Price Support (theory)

Aggarwal (2000) JF price support (empirical)

Krigman, Shaw and Womack (1999) JF flipping

12) IPO Stylized Facts (Lockups, Cycles, etc.)

Jenkinson and Ljungqvist (1996) – waves

Loughran and Ritter – waves

Lowery and Schwert -- waves

Gompers and Lerner – post-IPO VC distributions

Schultz (1993) JFE – unit offerings

Aggarwal, Krigman and Womack (2002) JFE - lockups

Brav and Gompers (2003) -- lockups

13) Corporate Financing and Long-Run Performance

Ritter (1991) JF – returns after IPOs

Barber and Lyon (1997) JFE – methodology

Gompers and Lerner – an out of sample test

Speiss and Affleck-Graves (1999) JFE – returns after debt issues

Eckbo, Masulis and Norli – returns after SEOs

14) Venture Capital

Admati and Pfleiderer (1994) JF – conflicts within syndicate

Stein (1992) JFE – a motivation for convertible securities

Meginson and Weiss (1991) JF – tests VC certification hypothesis

Gompers (1995) JF – role of staging

Kaplan and Stromberg (2000) – empirical analysis of contracts

Triantis (2001) – nice survey paper

15) Student Presentations