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- Publications
- Influence
A Theory of Dividends Based on Tax Clienteles
- Franklin Allen, A. Bernardo, I. Welch, I. Welch
- Economics
- 1 December 2000
This paper offers a novel explanation for why some firms prefer to pay dividends rather than repurchase shares. It is well-known that institutional investors are relatively less taxed than individual… Expand
Gain, Loss, and Asset Pricing
- A. Bernardo, Olivier Ledoit
- Economics
- Journal of Political Economy
- 1 February 2000
We develop an approach to asset pricing in incomplete markets that bridges the gap between the two fundamental approaches in finance: model‐based pricing and pricing by no arbitrage. We strengthen… Expand
On the Evolution of Overconfidence and Entrepreneurs
- A. Bernardo, I. Welch
- Economics
- 1 June 2001
This paper explains why seemingly irrational overconfident behavior can persist. Information aggregation is poor in groups in which most individuals herd. By ignoring the herd, the actions of… Expand
Liquidity and Financial Market Runs
- A. Bernardo, I. Welch
- Economics
- 1 February 2004
We model a run on a financial market, in which each risk-neutral investor fears having to liquidate shares after a run, but before prices can recover back to fundamental values. To avoid having to… Expand
Resources, real options, and corporate strategy
- A. Bernardo, B. Chowdhry
- Economics, Business
- 23 May 1998
The types of investments a firm undertakes will depend in part on what it expects the outcome of those investments to reveal about its skills, capabilities, and assets (i.e., its resources). We… Expand
Capital Budgeting and Compensation with Asymmetric Information and Moral Hazard
- A. Bernardo, H. Cai, Jiang Luo
- Economics
- 17 July 2000
We consider optimal capital allocation and managerial compensation mechanisms for decentralized firms when division managers have an incentive to misrepresent project quality and to minimize… Expand
A Theory of Legal Presumptions
- A. Bernardo, Eric Talley, I. Welch, I. Welch
- Economics
- 1 April 2000
This paper develops a theoretical account of presumptions, focusing on their capacity to mediate between costly litigation and ex ante incentives. We augment a standard moral hazard model with a… Expand
Growth Options, Beta, and the Cost of Capital
- A. Bernardo, B. Chowdhry, A. Goyal
- Economics
- 1 July 2007
We show how to decompose a firm's beta into its beta of assets-in-place and its beta of growth opportunities. Our empirical results demonstrate that the beta of growth opportunities is greater than… Expand
Asset market equilibrium with general tastes, returns, and informational asymmetries
- A. Bernardo, K. Judd
- Economics
- 1 February 2000
Abstract This paper develops a general computational approach for solving rational expectations equilibrium in asset markets with asymmetric information. Our approach can be applied to models with… Expand
Capital Budgeting in Multi-Division Firms: Information, Agency, and Incentives
- A. Bernardo, H. Cai, J. Luo
- Economics
- 11 March 2002
We consider a firm with two investment projects (divisions) each run by a manager who can provide (i) (unverifiable) information about the quality of either or both projects and (ii) (unverifiable)… Expand