Crowdfunding has generally been used to finance very innovative projects. Recently, however, companies have begun using it to finance more traditional products where they compete against other sellers of similar products. One of the major crowdfunding platforms, Indiegogo, has launched several...

This paper offers a model of crowdfunding that represents a growing area of interest among practitioners and theorists. It is one of the first articles analyzing the choice between different types of crowdfunding (reward-based vs. equity-based) and the choice between crowdfunding and traditional...

This paper offers a model of crowdfunding that represents a growing area of interest among practitioners and theorists. The model is based on asymmetric information between founders and funders regarding projects' quality. It provides several implications that have not yet been tested. For...

The literature analyzing games where some players have private information about their types is usually based on the duality of good and bad types (GB approach), where good type denotes the type with better quality. In contrast, this paper analyzes a signalling game without types hierarchy....

We analyze a model with two-dimensional asymmetric information in which the employer has better information about the firm's earnings potential and the employee is subject to moral hazard. The employee's contract consists of an annual bonus and stock options. We focus on two issues: how...

This article is the first to analyze the simultaneous choice of investment and organizational form using the behavioral finance approach. When entrepreneurs are rational, the choice of investment and organizational form is irrelevant in most cases. However, when entrepreneurs are...

This paper surveys 4 major capital structure theories: trade-off, pecking order, signaling and market timing. For each theory, a basic model and its major implications are presented. These implications are compared to the available evidence. This is followed by an overview of pros and cons for...

Traditional pecking-order theory (POT) cannot explain why good-quality firms issue equity: this is often considered to be an empirical puzzle. We build a model of capital structure that has elements of both asymmetric information and behavioral finance. Firms have private information about their...

This article analyzes the optimal design of securities in situations where ex-ante asymmetric information about a firm`s current profit is symmetric and that about future profit is asymmetric. Also a complete contract contingeant on a future profit is impossible to write except establishing...

Flexibility theory of capital structure, asymmetric information, credit rationing, life cycle theory and market timing are consistent with many patterns of financing of entrepreneurial or small/medium size enterprises (SME) in Canada. Tax theory of capital structure does not seem to play a...