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...

This paper studies the performance of delegated decision-making schemes in a two-stage, multi-division capital budgeting problem for a shared investment with an inherent abandonment option. Applying both robust goal congruence and sequential adverse selection frameworks, we show that the optimal...