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Incentives for Experimenting Agents
Horner, Johannes; Samuelson, Larry - Cowles Foundation for Research in Economics, Yale University - 2009
We examine a repeated interaction between an agent, who undertakes experiments, and a principal who provides the requisite funding for these experiments. The agent’s actions are hidden, and the principal cannot commit to future actions. The repeated interaction gives rise to a dynamic agency...
Persistent link: https://www.econbiz.de/10009645612
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Incentives for Experimenting Agents
Horner, Johannes; Samuelson, Larry - Cowles Foundation for Research in Economics, Yale University - 2009
We examine a repeated interaction between an agent, who undertakes experiments, and a principal who provides the requisite funding for these experiments. The repeated interaction gives rise to a dynamic agency cost — the more lucrative is the agent’s stream of future rents following a...
Persistent link: https://www.econbiz.de/10010895676
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Incentives for Experimenting Agents
Horner, Johannes; Samuelson, Larry - Cowles Foundation for Research in Economics, Yale University - 2009
We examine a repeated interaction between an agent, who undertakes experiments, and a principal who provides the requisite funding for these experiments. The repeated interaction gives rise to a dynamic agency cost—the more lucrative is the agent’s stream of future rents following a failure,...
Persistent link: https://www.econbiz.de/10011265334
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Venture Capital and Sequential Investments
Bergemann, Dirk; Hege, Ulrich; Peng, Liang - Cowles Foundation for Research in Economics, Yale University - 2008
We present a dynamic model of venture capital financing, described as a sequential investment problem with uncertain … the speed of the investment and the optimal path of staged investments. We derive the dynamically optimal funding policy … period of 1987-2002. First, the investment flow starts low if the failure risk is high and accelerates as the projects mature …
Persistent link: https://www.econbiz.de/10008531398
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Venture Capital and Sequential Investments
Bergemann, Dirk; Hege, Ulrich; Peng, Liang - Cowles Foundation for Research in Economics, Yale University - 2008
We present a dynamic model of venture capital financing, described as a sequential in­vestment problem with uncertain … the speed of the investment and the optimal path of staged investments. We derive the dynamically optimal funding policy … period of 1987-2002. First, the investment flow starts low if the failure risk is high and accelerates as the projects mature …
Persistent link: https://www.econbiz.de/10005593284
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Venture Capital and Sequential Investments
Bergemann, Dirk; Hege, Ulrich; Peng, Liang - Cowles Foundation for Research in Economics, Yale University - 2008
We analyze sequential investment decisions in an innovative project that depend on the investor's information about the … parameters and the continuous adjustment of the investment strategy. Investors decide sequentially about the speed of investment … predictions in a large sample of venture capital investment in the U.S. for the period of 1987-2002. First, the investment flow …
Persistent link: https://www.econbiz.de/10005196018
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The Financing of Innovation: Learning and Stopping
Bergemann, Dirk; Hege, Ulrich - Cowles Foundation for Research in Economics, Yale University - 2001
This paper considers the financing of a research project under uncertainty about the time of completion and the probability of eventual success. We distinguish between two financing modes, namely relationship financing, where the allocation decision of the entrepreneur is observable, and arm's...
Persistent link: https://www.econbiz.de/10005196057
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The Financing of Innovation: Learning and Stopping
Bergemann, Dirk; Hege, Ulrich - Cowles Foundation for Research in Economics, Yale University - 2001
This paper considers the financing of a research project under uncertainty about the time of completion and the probability of eventual success. The uncertainty about future success gradually diminishes with the arrival of addtional funding. The entrepreneur controls the funds and can divert...
Persistent link: https://www.econbiz.de/10005087360
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Incentives for Experimenting Agents
Horner, Johannes; Samuelson, Larry - Cowles Foundation for Research in Economics, Yale University - 2009
We examine a repeated interaction between an agent, who undertakes experiments, and a principal who provides the requisite funding for these experiments. The agent's actions are hidden, and the principal, who makes the offers, cannot commit to future actions. We identify the unique Markovian...
Persistent link: https://www.econbiz.de/10005064218
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Financial Innovation, Collateral and Investment
Fostel, Ana; Geanakoplos, John - Cowles Foundation for Research in Economics, Yale University - 2013
Financial innovations that change how promises are collateralized can affect investment, even in the absence of any … change in fundamentals. In C-models, the ability to leverage an asset always generates over-investment compared to Arrow … Debreu. The introduction of CDS always leads to under-investment with respect to Arrow Debreu, and in some cases even …
Persistent link: https://www.econbiz.de/10011196013