Why do publicly traded companies go private? In a post-dot-com "delisting surge," more than twice as many U.S. public companies are choosing to go private every year as in 2000. Researchers from Washington University in St. Louis and the University of Amsterdam think they know why: investor-management relations. In Market Liquidity, Investor Participation and Managerial Autonomy: Why Do Firms Go Private? the authors examine a hypothetical, publicly traded firm wrestling with exposure to the public markets. While it lowers the cost of capital, staying public also makes firms vulnerable to volatility and, more important, the authors say, makes managers uncertain about what their shareholders want. Private companies, meanwhile, because their investors' stakes are less liquid, don't have to deal with the same day-to-day disagreements about the optimal course of action. Which is why, the authors say, so many public companies opt out of the spotlight.