Does option-based compensation have a causal influence on payout policy? To address this question we examine the adoption of mandatory expensing of stock options (via accounting standard FAS123R), a plausible exogenous shock to the use of option-based compensation. As FAS123R applies to all firms, our identification strategy exploits the fact that the reduction in option-based compensation in r...

In many applications of cooperative game theory to economic allocation problems, such as river games, polluted river games and sequencing games, the game is totally positive (i.e., all dividends are nonnegative), and there is some ordering on the set of the players. A totally positive game has a nonempty core. In this paper we introduce constrained core solutions for totally positive games with...

t the time that Gorbachev became general secretary of the Communist Party of the Soviet Union (CPSU), the party’s monopoly position in the political sphere, and its rationale for playing the dominant role in economic and social arrangements, centered on a single thesis—one that had been prominently stated and emphatically endorsed since Lenin’s time. The party so fully represented the people’s ...

This paper uncovers an increasing proportion of quoted UK companies omitting cash dividends. Using a large panel of quoted UK companies, we estimate models for the incidence of dividend omissions and cuts as functions of financial characteristics including cash flow, leverage, investment opportunities, investment and company size. These variables account for most of the increase in omission sin...

This paper characterizes equilibrium asset prices under adaptive, rational and Bayesian learning schemes in a model where dividends evolve on a binomial lattice. The properties of equilibrium stock and bond prices under learning are shown to differ significantly. Learning causes the discount factor and risk-neutral probability measure to become path-dependent and introduces serial correlation a...

Article history: Received 16 July 2012 Received in revised form 23 August 2013 Accepted 3 September 2013 Available online 13 September 2013 The global financial crisis has caused controversial discussions about the capital base of the banking industry in Europe. Dividend cuts and omissions have been suggested as one possibility to improve the financial strength of banks by retaining earnings. H...

1. GENERAL TECHNIQUE The object of our study is s = (So, Sl , ..., SN) = (S,,)O<,,<N (1) where each Sn is a m-dimensional stochastic (real valued) vector, i.e. Sn = (sn(l), s~, 2), ..., S~ '')) (2) defined on a probabili ty space (f~, .~', P) and adapted to a filtration (.~'n)O<n<N with .~'0 being the o-algebra consisting of all null sets and their compl-efflents. In this paper we interpret S!/...