| This thesis consists of three chapters. In Chapter 1, we use a unique dataset of natural disasters, including earthquakes, floods, storms, volcanic eruptions, and wildfires, to test whether investors suffer from behavioral bias such as underreacting to news and investor sentiment. In Chapter 2, we study the rationale for firms' use of inside debt (pension and deferred compensation) by exploiting the relation between firms' default risk and inside debt. In Chapter 3, we research the role of inside debt in the optimal structure of chief executive officer pay by performing a simulation analysis of investment distortions. |
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