We study firms' internal resource allocation using a dynamic principal-agent model with endogenous cash-flow volatility …, decentralized, linear mechanism) giving the agent control over the resource quantities, project risk, and agent's equity share. The …

We study a firm's internal resource allocation using a dynamic principal-agent model with endogenous cash flow … agent's equity share. The implementation rationalizes the use of hurdle rates above a firm's cost of capital and transfer …