This paper investigates whether the observed diversification “discount” is partly due to the benchmarking error driven by a failure to consider investor rec

We present a theory of the diversification discount based on investor specialization in information; this is modeled by different investors having a lower belie

Diversified firms trade at a discount relatively to similar single-segment firms. We argue in this paper that this observed discount is not per se evidence that

A diversified firm can trade at a discount to a matched portfolio of single-segment firms if the diversified firm has either lower expected cash flows or higher

Moving Beyond Modern Portfolio Theory: Investing That Matters tells the story of how Modern Portfolio Theory (MPT) revolutionized the investing world and the re