Benchmark-linked capital flows increase firms' CAPM βs, thereby raising managers' perceived cost of equity and reducing investment. Using exogenous variation from Russell and S&P 500 reconstitutions, we show that inclusion in a benchmark stock index increases a stock's CAPM β. Managers interpret the higher β as a higher cost of equity and reduce investment. Consistent with this mechanism, benchmark inclusion also raises the perceived cost of equity among stock analysts and regulators. Industries with larger increases in βs due to benchmarking have accumulated less capital over the past two decades. Benchmark-induced changes in the cross-section of CAPM βs do not cancel out but affect aggregate investment because higher βs fall on many firms with high investment elasticities, while lower βs benefit a few large but inelastic firms.

We examine whether investors price firms' ability to suppress unfavorable information generated by outsiders. We exploit the staggered adoption of state anti-SLAPP (Strategic Lawsuits Against Public Participation) laws, which limit firms' use of litigation to deter outside criticism. Using an imputation-based difference-in-differences design, we find that anti-SLAPP adoption lowers firms' cost of equity (COE). We further show that anti-SLAPP laws meaningfully alter firms' information environments by increasing unfavorable outside information, reducing disclosures of litigation related to criticism and speech, and increasing reputational-risk disclosures. Consistent with an uncertainty-resolution mechanism, anti-SLAPP adoption reduces information asymmetry, firm risk, undervaluation, and stock price crash risk, indicating that investors face less uncertainty about hidden firm risks. The decline in COE is concentrated among firms with poorer information environments, weaker internal governance, and greater exposure to public scrutiny, where outside information is especially valuable for reducing informational uncertainty. Our findings identify firms' ability to suppress outside criticism as a distinct, priced information friction and suggest that legal institutions governing third-party speech play an important role in the information infrastructure of capital markets.

We study information resonance -- the extra weight people attach to information from people similar to them -- and examine its consequences. In a new lab experiment designed to isolate resonance, we show that people follow the advice of strangers who share characteristics with them at a much higher rate. We find that this is true not only for shared demographics or political identities, but also a broad range of beliefs, personality traits and even superficial preferences and we measure these effects in several types of choices. In the experiment, resonance affects a range of choices, including financial decisions. The structure of our design makes it unlikely that this is a fully rational behavior. To examine the consequences of resonance, we show how to re-purpose a standard information diffusion model, replacing geographic proximity with characteristic similarity. The model explains why role models matter, how social media can erode authority, and why promotion rules that look neutral can still produce homogeneous leadership teams. Finally, field evidence connects micro biases to aggregate outcomes: young workers disproportionately enter occupations already staffed by ethnically similar incumbents, and disproportionately leave those occupations when ethnic elders experience negative labor market shocks. By weaving together micro behavior, theory tools and macro consequences, the paper uncovers new levers for firms and policymakers to manipulate or assist investors.