Applying a time-discrete investment model and a setting with an entry and an exit option and cash flow uncertainty we present a dynamic analysis of the impact of various loss offset regimes on risky investment timing decisions. We find that a tax system with loss offset restrictions will not...

Tax uncertainty often negatively affects investment. Advance tax rulings (ATRs) are commonly used as a measure to provide tax certainty. Rulings are currently controversially discussed in the context of tax planning activities of multinational firms (Luxembourg Leaks). We analyze ATRs as tax...

In this paper we investigate the incentive effects of corporate taxes in an agency setting with a principal facing an investment opportunity including an abandonment option. We are particularly interested in the interplay of taxation and the real option on the principal's incentives to motivate...

Tax uncertainty often negatively affects investment. Advance tax rulings (ATRs) are commonly used to provide tax certainty. We analyze ATRs from the taxpayers' and tax authorities' perspectives. Investors request ATRs if the fee does not exceed a certain threshold. We integrate this finding into...

In entrepreneurial decisions making uncertain future profits often are a main characteristics of real investment opportunities. If investors can react to uncertainty the degree of irreversibility and timing flexibility inherent in the available project should be integrated into the decision...

This paper studies the influence of agency conflicts on the irreversibility effect. Using a dynamic variant of the static Baron and Myerson (Econometrica 50(4):911–930, <CitationRef CitationID="CR7">1982</CitationRef>) adverse selection model, we characterize under which circumstances the irreversibility effect arises in the presence...</citationref>

Applying a real option approach, this paper examines how asymmetric information alters key variables of a firm’s supplier switching process, such as the timing of contracting (hurried versus delayed contracting), transfer payments, set-up, switching, and abandonment decisions. In a symmetric...

We investigate how the organizational structure of a firm influences the decision making of its top management. Different organizational structures lead information to be processed in different ways by the individual decision makers, potentially creating an informational cascade within the...

In vertical relationships, manufacturers commonly rely on retailers to sell their goods. In this note, we analyze a manufacturer-retailer relationship in which a manufacturer delegates the sale of his product to a retailer who gets sequentially private information about the retail value of the...

In this study we examine earnings management in public listed firms within 15 EU member states plus two non-EU members, namely Switzerland and Norway. In 10 of the countries included in our sample, provisions were made to allow firms to use international accounting standards (IAS/IFRS) well...