Moral Hazard and Capital Structure Dynamics
نویسندگان
چکیده
منابع مشابه
Moral Hazard and Capital Structure Dynamics ∗
We base a contracting theory for a start-up firm on an agency model with observable but nonverifiable effort, and renegotiable contracts. Two essential restrictions on simple contracts are imposed: the entrepreneur must be given limited liability, and the investor’s earnings must not decrease in the realized profit of the firm. All message game contracts with pure strategy equilibria (and no th...
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This paper tests agency theory using unique entrepreneurial effort and financing choices data. Focusing on entrepreneurs as a special type of agent, the paper develops a modified principal-agent model within a private firm setting. In line with the typical agency theory prediction, this model suggests that the severity of entrepreneur moral hazard relates to the firm’s capital structure. Specia...
متن کاملCARESS Working Paper 02 - 07 Moral Hazard and Capital Structure Dynamics ∗
We base a contracting theory for a start-up firm on an agency model with observable but nonverifiable effort, and renegotiable contracts. Two essential restrictions on simple contracts are imposed: the entrepreneur must be given limited liability, and the investor’s earnings must not decrease in the realized profit of the firm. All message game contracts with pure strategy equilibria (and no th...
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This paper studies a general equilibrium model of an economy with production under uncertainty in which firms’ capital (ownership) structures creates a moral hazard problem for their managers. The concept of an equilibrium with rational, competitive price perceptions (RCPP) is introduced, in which investors correctly anticipate the optimal effort of entrepreneurs by observing their financial de...
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We present a dynamic general equilibrium model with heterogeneous rms. Owners of the rms delegate investment decisions to managers, whose consumption and investment decisions are private information. We solve the optimal contracts and characterize the implied general equilibrium. Our calibrated model has implications on the cross-sectional distribution and time-series dynamics of rmsinvestm...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2002
ISSN: 1556-5068
DOI: 10.2139/ssrn.318924