Cash Tender Offers for Shares—A Reply to Chairman Cohen

In the past few years, the corporate takeover device of the cash tender offer has grown in frequency, and thus in importance. Concomitantly, legislation designed to sweep this relatively unregulated method of acquiring corporate control into the ambit of the SEC has been proffered. In response to the reasons which have been propounded in favor of such regulation, the author analyzes the pending legislation, appraises its likely consequences, and evaluates its objectives

Cash Tender Offers for Shares—A Reply to Chairman Cohen

In the past few years, the corporate takeover device of the cash tender offer has grown in frequency, and thus in importance. Concomitantly, legislation designed to sweep this relatively unregulated method of acquiring corporate control into the ambit of the SEC has been proffered. In response to the reasons which have been propounded in favor of such regulation, the author analyzes the pending legislation, appraises its likely consequences, and evaluates its objectives

Insider Trading: Hayek, Virtual Markets, and the Dog that Did Not Bark.

This Essay briefly reexamines the great debates on the role of insider trading in the corporate system from the perspectives of efficiency of capital markets, harm to individual investors, and executive compensation. The focus is on the mystery of why trading by all kinds of insiders as well as knowledgeable outsiders was studiously ignored by the business and investment communities before the advent of insider trading regulation. It is hardly conceivable that officers, directors, and controlling shareholders would have remained totally silent in the face of widespread insider trading if they had seen the practice as being harmful to the company, to themselves, or to investors. By analogy with the famous article by Friedrich Hayek, The Use of Knowledge in Society, this Essay considers the problem of obtaining necessary information for managers of large corporate enterprises. The suggested analytical framework views the share price, sensitively impacted by informed trading, as a mechanism for timely transmission of valuable information to top managers and large shareholders. Informed trading in the stock market is also compared to “prediction” or “virtual” markets currently used by corporations and policymakers.

US Rejection of the Kyoto Protocol: The Impact on Compliance Costs and CO 2 Emissions

Despite the US rejection of the Kyoto Protocol, the meeting of the parties to the UN Framework Convention on Climate Change in July 2001 has increased the likelihood that the Protocol will be ratified. This raises a number of issues concerning mitigation costs, particularly for the buyers and sellers of emission permits. In this paper, we examine how the US decision is likely to affect compliance costs for other Annex B countries during the first commitment period. We also explore the implications for US emissions. Key findings include: 1. Participating OECD countries may experience a decline in mitigation costs, but because of the banking provision contained in the Protocol, the decline may not be as great as some would suggest. 2. If the majority of 'hot air' is concentrated in a small number of countries in Eastern Europe and the former Soviet Union, these countries may be able to organize a sellers' cartel and extract sizable economic rents; and 3. Even in the absence of mandatory emission reduction requirements, US emissions in 2010 may be lower than their business-as-usual baseline because of expectations regarding future regulatory requirements.

Market Exchange Rates or Purchasing Power Parity: Does the Choice Make a Difference to the Climate Debate?

Critics of the Intergovernmental Panel on Climate Change's Special Report on Emission Scenarious claim that the use of market exchange rates rather than purchasing power parity has led to a significant upward bias in projections of greenhouse gas emissions, and hence unrealistically high future temperature. Rather than revisit the debate on the choice of exchange rates, we address a much simpler question: does the choice make a difference when it comes to projecting future temperature change' Employing a computable general equilibrium model designed to examine a variety of issues in the climate debate, we find that the answer is yes, but the difference is only minor.

The Impact of Learning-By-Doing on the Timing and Costs of CO 2 Abatement

A particular ceiling on atmospheric CO2 concentrations can be maintained through a variety of emission pathways. Over the past decade, there has been considerable debate over the characteristics of a least-cost pathway. Some have suggested that a gradual departure from the emissions baseline will be the most cost-effective because it reduces the pressure for premature retirement of the existing capital stock, and it provides valuable time to develop low-cost, low-carbon emitting substitutes. Others counter that a major flaw in analyses that support this line of reasoning is that they ignore learning-by-doing (LBD). In this paper, we examine the impact of LBD on the timing and costs of emissions abatement. With regard to timing, we find that including learning-by-doing does not significantly alter the conclusions of previous studies that treated technology cost as exogenous. The analysis supports the earlier conclusion that for a wide range of stabilization ceilings, a gradual transition away from the 'no policy' emissions baseline is preferable to one that requires substantial near-term reductions. We find that the major impact of including learning-by-doing is on the costs of emission abatement. Depending upon the sensitivity of costs to cumulative experience, LBD can substantially reduce the overall costs of emissions abatement.

Insider Trading: Hayek, Virtual Markets, and the Dog that Did Not Bark

This Essay briefly reexamines the great debates on the role of insider trading in the corporate system from the perspectives of efficiency of capital markets, harm to individual investors, and executive compensation. The focus is on the mystery of why trading by all kinds of insiders as well as knowledgeable outsiders was studiously ignored by the business and investment communities before the advent of insider trading regulation. It is hardly conceivable that officers, directors, and controlling shareholders would have remained totally silent in the face of widespread insider trading if they had seen the practice as being harmful to the company, to themselves, or to investors. By analogy with the famous article by Friedrich Hayek, The Use of Knowledge in Society, this Essay considers the problem of obtaining necessary information for managers of large corporate enterprises. The suggested analytical framework views the share price, sensitively impacted by informed trading, as a mechanism for timely transmission of valuable information to top managers and large shareholders. Informed trading in the stock market is also compared to “prediction” or “virtual” markets currently used by corporations and policymakers

Insider Trading: Hayek, Virtual Markets and the Dog that Did Not Bark

This Essay briefly reexamines the great debates on the role of insider trading in the corporate system from the perspectives of efficiency of capital markets, harm to individual investors, and executive compensation. The focus is on the mystery of why trading by all kinds of insiders as well as knowledgeable outsiders was studiously ignored by the business and investment communities before the advent of insider trading regulation. It is hardly conceivable that officers, directors, and controlling shareholders would have remained totally silent in the face of widespread insider trading if they had seen the practice as being harmful to the company, to themselves, or to investors. By analogy with the famous article by Friedrich Hayek, The Use of Knowledge in Society, this Essay considers the problem of obtaining necessary information for managers of large corporate enterprises. The suggested analytical framework views the share price, sensitively impacted by informed trading, as a mechanism for timely transmission of valuable information to top managers and large shareholders. Informed trading in the stock market is also compared to “prediction” or “virtual” markets currently used by corporations and policymakers