the standard approach, the target firm's expected return and risk are modeled as a parametric curve in terms of a critical … business decision. A general condition is derived for characterizing how a risk-averse or risk-seeking agent may behave … differently from a risk-neutral decision maker. This general theorem is applied to solve several examples that demonstrate the …

and exogenous macro risks determine total project cash flow risk. We find: (i) as long as the stochastic volatility cannot …

.e., a static, decentralized, linear mechanism), giving the agent control over the resource quantities, project risk, and … prices above marginal cost, while showing that hurdle rates or transfer prices may not vary with the agent’s risk choice …

, decentralized, linear mechanism) giving the agent control over the resource quantities, project risk, and agent's equity share. The … showing that hurdle rates or transfer prices may not vary with the agent's risk choice.[The SSRN version includes the Internet …