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Persistent Private Information
Williams, Noah - 2008
This paper studies the design of optimal contracts in dynamic environments where agents have private information that is persistent. In particular, I focus on a continuous time version of a benchmark insurance problem where a risk averse agent would like to borrow from a risk neutral lender to...
Persistent link: https://www.econbiz.de/10012464753
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A Continuous-Time Agency Model of Optimal Contracting and Capital Structure
DeMarzo, Peter M. - 2004
interpreted as a combination of equity, a credit line, and either long-term debt or a compensating balance requirement (i.e., a … cash position). The project is terminated if the agent exhausts the credit line and defaults. Once the credit line is paid …
Persistent link: https://www.econbiz.de/10012468076
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Moral Hazard and Unemployment in Competitive Equilibrium
Rey, Patrick; Stiglitz, Joseph E. - National Bureau of Economic Research - 2024
Principal-agent models take outside options, determining participation and incentive constraints, as given. We construct a general equilibrium model where workers' reservation wages and the maximum punishment acceptable before workers quit are instead determined endogenously. We simultaneously...
Persistent link: https://www.econbiz.de/10014635663
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Modeling Managers As EPS Maximizers
Ben-David, Itzhak; Chinco, Alexander M. - National Bureau of Economic Research - 2023
Textbook theory assumes that firm managers maximize the net present value of future cash flows. But when you ask them, real-world firm managers consistently say that they are maximizing something else entirely: earnings per share (EPS). Perhaps this is a mistake. No matter. We take firm managers...
Persistent link: https://www.econbiz.de/10014250143
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Contracts with Interdependent Preferences
Ray, Debraj; Weretka, Marek - National Bureau of Economic Research - 2024
This paper studies contracting between a principal and multiple agents. The setup is classical except for the assumption that agents have interdependent preferences. We characterize cost effective contracts, and relate the direction of co-movement in rewards -- "joint liability" (positive) or...
Persistent link: https://www.econbiz.de/10014512144
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Financing Infrastructure in the Shadow of Expropriation
Acharya, Viral V.; Parlatore, Cecilia; Sundaresan, Suresh M. - National Bureau of Economic Research - 2022
. The model captures several other features prevalent in infrastructure financing such as government co-investment, tax …
Persistent link: https://www.econbiz.de/10013334350
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Why are Buyouts Levered : The Financial Structure of Private Equity Funds
Axelson, Ulf - 2007
This paper presents a model of the financial structure of private equity firms. In the model, the general partner of the firm encounters a sequence of deals over time where the exact quality of each deal cannot be credibly communicated to investors. We show that the optimal financing arrangement...
Persistent link: https://www.econbiz.de/10012465831
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Agency, Information and Corporate Investment
Stein, Jeremy C. - 2001
This essay surveys the body of research that asks how the efficiency of corporate investment is influenced by problems … that the marginal return to investment in firm i is the same as the marginal return to investment in firm j? Second, do … capital budgeting process get within-firm allocations right, so that the marginal return to investment in firm i's division A …
Persistent link: https://www.econbiz.de/10012470382
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Channeling Domestic Savings into Productive Investment Under Asymmetric Information : The Essential Role of Foreign Direct Investment
Razin, Assaf - 1997
Foreign direct investment (FDI) is observed to be a predominant form of capital flows to low and middle income … productive investment in the presence of asymmetric information between the managing owners of firms and other portfolio … stakeholders. We emphasize the crucial role played by FDI in sustaining equity-financed capital investment for economies plagued by …
Persistent link: https://www.econbiz.de/10012472477
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Q-Monetary Transmission
Jeenas, Priit; Lagos, Ricardo - National Bureau of Economic Research - 2022
We study the effects of monetary-policy-induced changes in Tobin's q on corporate investment and capital structure. We … evidence, and quantify the relevance for monetary transmission to aggregate investment …
Persistent link: https://www.econbiz.de/10013210051