Investor payment is widely believed to eliminate conflicts of interest in information sales, including ratings. I show that this conventional wisdom does not hold when the information buyer is a delegated asset manager with market power and its own agency frictions. In contrast to small dispersed investors, a large fund with existing holdings is willing to purchase a biased rating that inflates their market value. The provider prefers to sell distorted ratings when market illiquidity erodes information rents but not distortion rents, which increase with clients’ market power. Although bias reduces the information content of ratings themselves, it can broaden their accessibility to investors and eventually improve price informativeness. As such, stricter regulation of rating providers can hurt overall market efficiency.

Common wisdom suggests that greater climate-risk disclosure improves welfare. We show that this need not be true. A firm endogenously chooses whether to adopt a costly green project to maximize its stock price. When disclosure reveals the project’s climaterisk exposure (“greenness”), mandatory transparency reduces green adoption and can lower investor welfare. Costly voluntary disclosure can improve outcomes relative to both mandatory disclosure and no disclosure by balancing information benefits against adoption incentives. While information regulation alone cannot achieve the first-best, pairing full disclosure with green subsidies can. We explore implications for adoption of abatement technologies and hedging with climate derivatives.

Conventional wisdom suggests that informed investors benefit from trading monopolistically. We show this can fail when investors face uncertainty about liquidity. In a Kyle (1985) framework, we compare profits under monopolistic and competitive equilibria when investors face uncertainty about liquidity trading volatility. While low uncertainty favors coordination, sufficiently high uncertainty reverses this: an individual investor's competitive profits can exceed total monopolistic profits. Endogenizing the collusion decision generates novel predictions: small increases in liquidity uncertainty can cause discrete jumps in trading volume, price volatility, and price informativeness.