Real Options in a Dynamic Agency Model, with Applications to Financial Development, IPOs, and Business Risk

We study investment options in a dynamic agency model. Moral hazard creates an option to wait and agency conflicts affect the timing of investment. The model sheds light, theoretically and quantitatively, on the evolution of firms' dynamics, in particular the decline of the failure rate and the decrease in the age of IPOs.

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Year of publication:	2007-11
Authors:	PHILIPPON, Thomas ; Sannikov, Yuliy
Institutions:	National Bureau of Economic Research (NBER)

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Extent:	application/pdf
Series:	NBER Working Papers.
Type of publication:	Book / Working Paper
Notes:	CF EFG Number 13584
Classification:	D82 - Asymmetric and Private Information ; D86 - Economics of Contract: Theory ; D92 - Intertemporal Firm Choice and Growth, Investment, or Financing ; E22 - Capital; Investment (including Inventories); Capacity ; G31 - Capital Budgeting; Investment Policy ; G32 - Financing Policy; Capital and Ownership Structure ; G33 - Bankruptcy; Liquidation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005710340