Behavioral Corporate Finance

Please answer the following questions:

1) Social norms are broadly defined as the informal rules that govern behavior in groups and societies. Is it possible that dividends are paid and valued because the are a 'social norm'? Explain using concepts and theories taught in this course.

2) Explain why managerial overconfidence and optimism both lead to over-investment in a capital budgeting context.

3) What warnings would you give to someone who is about to invest in an IPO? What steps would you take before investing in an IPO?