TY  - JOUR
TI  - Staged Financing with a Variable Return
AU  - Smirnov, Vladimir
AU  - Wait, Andrew
PY  - 2007
PB  - Walter de Gruyter GmbH
LA  - eng
AB  - This paper explores the hold-up problem between two parties (an entrepreneur and an investor) when one of the parties (the entrepreneur) is unable to commit not to repudiate the initial contract. To mitigate hold-up we allow the parties to stage investments over time and derive the optimal investment path in a model that places no restrictions on the growth of collateral. Our model predicts that neither positive wealth of the entrepreneur nor the lack of discounting ensures that all profitable projects proceed. We also derive necessary and sufficient conditions for the project to be financeable when there are no costs of delay.
UR  - https://doi.org/10.2202/1935-1704.1234
DO  - 10.2202/1935-1704.1234
T2  - The B.E. journal of theoretical economics
VL  - 7
IS  - 1
SN  - 1935-1704
SN  - 2194-6124
UR  - https://www.pollux-fid.de/r/cr-10.2202/1935-1704.1234
H1  - Pollux (Fachinformationsdienst Politikwissenschaft)
ER  -