Capital investment incentives in an inflationary environment

Valuation in an Inflationary Environment

Using illustrative examples, this paper shows that the Net Present Value for project evaluation should be based on estimates of free cash flows at nominal prices. It is a widespread practice to evaluate projects at constant or real prices. These days, the use of constant or real prices is an unnecessary oversimplification. In particular, we present an example where the results from the constant...

Social Security Incentives, Human Capital Investment and Mobility of Labor

Social Security Incentives, Human Capital Investment and Mobility of Labor Migration between countries with earnings-related and flat-rate pay-as-you-go social security systems may change human capital investments in both countries. The possibility of emigration boosts investments in human capital in the country with flat-rate benefits. Correspondingly, those expecting to migrate from the count...

Investment stage drifts and venture capital managerial incentives

Article history: Received 22 January 2014 Received in revised form 25 May 2015 Accepted 26 May 2015 Available online 29 May 2015 This paper investigates VC investment stage drifts as explained by the outcomes of managerial incentive schemes under different financial market conditions and past return performances. We exploit a unique dataset containing data for all of the venture capital funds i...

NEW MORTGAGE DESIGNS an INFLATIONARY ENVIRONMENT

Investment incentives in bilateral trading

a r t i c l e i n f o a b s t r a c t JEL classification: C72 C78 D44 D82 Keywords: Bilateral trading k-Double auctions Incomplete contracts Investment incentives Optimal mechanism Opt-out clause We characterize the surplus-maximizing trading mechanism under two-sided incomplete information and interim individual rationality, when one party can make a value-enhancing specific investment. This m...