Crime timing

This note develops a dynamic model of crime that determines the conditions under which it is optimal for a criminal to delay commission of a crime rather than committing it immediately. It also examines the optimal enforcement strategy in this context. We derive two results. The first is that it might be optimal to postpone a crime that is profitable now if its benefit increase quickly enough in the future and that a crime that is not yet optimal might become so in the future. The second is that it is optimal to underdeter crime.

Security-voting structure and bidder screening

This paper analyzes how non-voting shares affect the takeover outcome in a single-bidder model with asymmetric information and private benefit extraction. In equilibrium, the target firm’s security-voting structure influences the bidder’s participation constraint and in response the shareholders’ conditional expectations about the post-takeover share value. Therefore, the structure can be chosen to discriminate among bidder types. Typically, the socially optimal structure deviates from one share - one vote to promote all and only value-increasing bids. As target shareholders ignore takeover costs, they prefer more takeovers and hence choose a smaller fraction of voting shares than is socially optimal. In either case, the optimal fraction of voting shares decreases with the quality of shareholder protection and increases with the incumbent manager’s ability. Finally, shareholder returns are higher when a given takeover probability is implemented by (more) non-voting shares rather than by (larger) private benefits

Large shareholder portfolios, monitoring and legal protection of shareholders : A note

Working Paper du GATE 2001-18We consider an optimal portfolio diversification model in which a large shareholder can influence shares return by monitoring efficiently managers. Less diversification decreases insurance but increases the stake in the ownership and then enhances efficiency of management monitoring. We analyze the effect of legal shareholders protection on portfolio diversification.Nous considérons un modèle de diversification optimale de portefeuille dans lequel un gros actionnaire peut influencer le rendement d'un actif en contrôlant efficacement les managers. Un portefeuille moins diversifié réduit l'assurance mais améliore l'efficacité du contrôle sur la direction. Nous analysons l'impact de la protection juridique des actionnaires et de la dilution de la propriété sur la diversification du portefeuille

The Lawyer as a Portfolio Manager: How Does the Fee System Influence on the Lawyer\u27s Decision of Handling Legal Claim?

We use the portfolio theory to analyze the lawyer\u27s decision regarding the type of case the lawyer will handle. We offer some insights into the widespread idea that contingency lawyers are providing a risk sharing service. We demonstrate that a contingent fee lawyer diversifies his portfolio. We show that reputation induces more, but not fully, concentration, since a lawyer with greater reputation or expertise selects more risky cases. The size of the law firm has the same result

Terms of loan for Christian College at Gainesville

One-page document from the trustees of the Christian College at Gainesville outlining the terms of the loan the college was seeking. The proposal is dated 4 October 1912

The Sales of Small firms : a multidimensional analysis

Working Paper du GATE 2001-02This paper endogeneizes the security voting structure in an auction mechanism used to sell a small firm. The design of security voting structure allows the seller to choose between two objectives which are not mutually consistent. If the seller wants to maximize his revenue, he should retain some shares to benefit from the future dividends generated by the acquirer. At the opposite, if he wants to sell his firm to the most efficient candidate, he should sell all the shares.Ce papier étudie une procédure particulière de vente de PME, l'open-bid, dans laquelle nous endogénéisons la structure en droits de vote des actifs financiers. Cette procédure de vente se rapproche d'une enchère ascendante. Le vendeur peut avoir deux objectifs divergents: maximiser son revenu et assurer la pérennité de son entreprise. Le premier objectif est atteint si le vendeur conserve une partie des parts de l'entreprise afin de tirer bénéfices des dividendes futurs réalisés par le repreneur. Le second objectif implique la vente de la totalité des parts de l'entreprise

Large shareholder portfolios, monitoring and legal protection of shareholders : A note

We consider an optimal portfolio diversification model in which a large shareholder can influence shares return by monitoring efficiently managers. Less diversification decreases insurance but increases the stake in the ownership and then enhances efficiency of management monitoring. We analyze the effect of legal shareholders protection on portfolio diversification.corporate governance; large shareholders; optimal portfolio choice

Market-making, inventories and martingale pricing

Working Paper du GATE 2002-03We discuss Shen and Starr(2002) results and show that the bid-ask spread of a monopolistic market-marker doesn't depend on his inventory when he posts ''martingale prices '' in an inventory model with random volumes and an unknown direction of trade.Nous discutons les résultats de Shen et Starr (2002) et montrons que la fourchette de prix de réservation d'un teneur de marché ne dépend pas de son inventaire lorsque celui-ci fixe un prix suivant une martingale dans un modèle d'inventaire avec volumes aléatoires et direction de l'échange inconnnue

Security-voting structure and bidder screening

This paper demonstrates that non-voting shares can promote takeovers. When the bidder has private information, shareholders may refuse to tender because they suspect to sell at an ex post unfavourable price. The ensuing friction in the sale of cash flow rights can prevent an efficient change of control. Separating cash flow and voting rights alters the degree of cross-subsidization among bidder types. It can therefore be used as an instrument to promote takeover activity and to discriminate between efficient and inefficient bidders. The optimal fraction of non-voting shares decreases with managerial ability, implying an inverse relationship between firm value and non-voting shares

The Sales of Small firms : a multidimensional analysis

This paper endogeneizes the security voting structure in an auction mechanism used to sell a small firm. The design of security voting structure allows the seller to choose between two objectives which are not mutually consistent. If the seller wants to maximize his revenue, he should retain some shares to benefit from the future dividends generated by the acquirer. At the opposite, if he wants to sell his firm to the most efficient candidate, he should sell all the shares.auctions; security voting structure; small firms