Abstract This paper extends the literature on predatory short selling and bailouts through a joint analysis of the two. We consider a model with informed short sales, as well as uninformed predatory short sales, which can trigger the inefficient liquidation of a firm. We obtain several novel results: A government commitment to bail out insolvent firms with positive probability can increase welfare because it selectively deters predatory short selling without hampering desirable informed short sales. Contrasting a common view, bailouts can be optimal ex ante but undesirable ex post. Furthermore, bailouts in our model are a better policy tool than short selling restrictions. Welfare gains from the bailout policy are unevenly distributed: shareholders gain while taxpayers lose. Bailout taxes allow ex ante Pareto improvements.

中文翻译：

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掠夺性卖空和纾困

摘要本文通过对二者的联合分析，扩展了掠夺性卖空和纾困的文献。我们考虑一种模型，该模型具有知情的卖空以及不知情的掠夺性卖空，这可能会触发公司的低效率清算。我们得到了一些新颖的结果：政府承诺以正的概率救助破产的公司可以增加福利，因为它有选择地阻止掠夺性卖空，而又不会妨碍理想的卖空。与通常的观点相反，纾困可能是事前最佳的选择，但事后却不理想。此外，与卖空限制相比，我们模型中的救助方案是更好的政策工具。纾困政策带来的福利收益分配不均：股东收益增加，而纳税人损失。救助税可以事前改善帕累托。