Investment timing, agency, and information

• 成果类型: Article
• 署名作者: Grenadier, SR; Wang, N
• 署名单位: Columbia University; National Bureau of Economic Research; Stanford University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2004.02.004
• 发表日期: 2005
• 页码: 493-533
• 关键词: real options; investment timing; CONTRACTING; AGENCY

摘要

This paper provides a model of investment timing by managers in a decentralized firm in the presence of agency conflicts and information asymmetries. When investment decisions are delegated to managers, contracts must be designed to provide incentives for managers to both extend effort and truthfully reveal private information. Using a real options approach, we show that an underlying option to invest can be decomposed into two components: a manager's option and an owner's option. The implied investment behavior differs significantly from that of the first-best no-agency solution. In particular, greater inertia occurs in investment, as the model predicts that the manager will have a more valuable option to wait than the owner. (c) 2004 Elsevier B.V. All rights reserved.