This research evidences the value of flexibility on the investment decision, in the exploration sector of copper, face to the existence of an abandonment option. The results of three evaluation models are compared: the Net Present Value; the Binomial and a Suitable Binomial to the exploration...

This article intends to evidence the flexibility effect in the investment decision. This flexibility is known by the real options term, these options possess value, which will increase the value of an investment that possesses them. The traditional investments evaluation methods are not enough...

This article analyses the exit decision in the European venture capital market, studying <italic>when to exit</italic> and how it interacts with the <italic>exit form</italic>. Using a competing risks model we study the impact on the exit decision of the characteristics of venture capital investors, of their investments and of...

This article analyzes Portuguese venture capital exits, exploring the relationship between the type of exit and the asymmetry of information of the venture capital investments. The central hypothesis being tested is that the occurrence of partial exits is associated with signalling the...

Several recent papers argue that contracts provide reference points that affect ex post behavior. We test this hypothesis in a canonical buyer-seller relationship with renegotiation. Our paper provides causal experimental evidence that an initial contract has a highly significant and...

We present an international trade model with multiproduct firms. Firms are heterogeneously endowed with two types of capabilities that jointly determine the trade-off within firms between managing a large portfolio of products and producing at low marginal cost. The model can explain many of the...

This paper reports data from a laboratory experiment on two-period moral hazard problems. The findings corroborate the contract-theoretic insight that even though the periods are technologically unrelated, due to incentive considerations principals can benefit from offering long-term contracts...

We study a continuous-time game of strategic experimentation in which the players try to assess the failure rate of some new equipment or technology. Breakdowns occur at the jump times of a Poisson process whose unknown intensity is either high or low. In marked contrast to existing models, we...

We study endogenous group formation in tournaments employing experimental three-player contests. We find that players in endogenously formed alliances cope better with the moral hazard problem in groups than players who are forced into an alliance. Also, players who are committed to expending...

The compensation of executive board members in Germany has become a highly controversial topic since Vodafone's hostile takeover of Mannesmann in 2000 and it is again in the spotlight since the outbreak of the financial crisis of 2009. Based on unique panel data evidence of the 500 largest firms...