This paper studies the influence of agency conflicts on the irreversibility effect. Using a dynamic variant of the static Baron and Myerson (1982) adverse selection model, we characterize under which circumstances the irreversibility effect arises in the presence and absence of an agency...

The separation of ownership and control in firms brings up the issue of how and what to delegate to managers. There exists a large body of literature that analyzes strategic delegation in which owners understand the incentives that managers face when they operate in imperfectly competitive...