We study SPACs in a continuous-time delegated investment model. Our model is built upon three unique features of SPACs … control over investment approval. Due to the misalignment in incentives, the sponsor has an increasing incentive to propose … control over investment approval reduces everyone’s welfare. This adverse effect is more pronounced if entrepreneurs …

any manager who is unfavorable to some investors. The contract problem has hidden types, hidden actions, hidden knowledge …

, a partner of an investment company, and a fund manager of the company. The investor cannot perfectly observe the partner …

dividends of the firm over time, and will consider a pie sharing rule contract over the dividends of consumption goods to …

management. We study the optimal contract of a trader who (a) must privately exert costly effort in order to collect information … limit is not a mere hard constraint on the action space of a trader; rather, the optimal contract includes the use of a risk …

appropriate choice of benchmark it is always optimal to include a bonus incentive fee in the contract. We derive the conditions … faces moral hazard with respect to the effort and risk choices of the portfolio manager. The employment contract promises … benchmark-linked option-type “bonus” incentive fee. We show that the option-type incentive helps overcome the effort …