Essays on Closed-End Funds and Advance Disclosure of Trading

My dissertation is comprised of three essays. In the first essay, I present a dynamic partial equi-librium model of a simple economy with a closed-end fund. My model demonstrates that a com-bination of management fees and a time-varying information advantage for a fund manager can account for several empirically observed characteristics of closed-end funds simultaneously. The model is consistent with the basic time-series behavior of fund discounts, explains why funds issue at a premium, accounts for the excess volatility of fund returns, justifies the underperformance of funds that trade at a premium, and is consistent with many time-series correlations between discounts, NAV returns, and fund returns. In the second essay, I present a dynamic rational expectations model of closed-end fund discounts that incorporates feedback effects from activist arbitrage and lifeboat provisions. I find that the potential for activism and the existence of a lifeboat both lead to narrower discounts. Furthermore, both activist arbitrage and lifeboats effectuate an ex post transfer of wealth from managers to investors but an ex ante transfer of wealth from low-ability managers to high-ability managers. On average, investor wealth is unaffected by either activist arbitrage or lifeboats because their potentia