This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Optimal Design of Securities under Asymmetric Information Author info | Abstract | Publisher info | Download info | Related research | Statistics Nachman, David C
Noe, Thomas H
Additional information is available for the following
registered author(s):
A firm must decide what security to sell to raise external capital to finance a profitable investment opportunity. There is ex ante asymmetry of information regarding the probability distribution of cash flow generated by the investment. In this setting, we derive necessary and sufficient conditions for a security to be optimal (uniquely optimal, that is, for pooling at this security to be an (the unique) equilibrium outcome. Using these conditions we show that the debt contract is (uniquely) optimal if and only if cash flows are ordered by (strict conditional stochastic dominance. Finally, we derive an equivalence relationship between optimal security designs and designs that minimize mispricing. Article published by Oxford University Press on behalf of the Society for Financial Studies in its journal, The Review of Financial Studies.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page . Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Article provided by Oxford University Press for Society for Financial Studies in its journal Review of Financial Studies .
Volume (Year): 7 (1994)
Issue (Month): 1 ()
Pages: 1-44
Download reference. The following formats are available: HTML
(with abstract ),
plain text
(with abstract ),
BibTeX ,
RIS (EndNote, RefMan, ProCite),
ReDIF
Handle: RePEc:oup:rfinst:v:7:y:1994:i:1:p:1-44Contact details of provider: Postal: Oxford University Press, Journals Department, 2001 Evans Road, Cary, NC 27513 USA. Fax: 919-677-1714 Email: Web page: http://www.rfs.oupjournals.org/ More information through EDIRC
Order Information: Web: http://www4.oup.co.uk/revfin/subinfo/
For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).
Keywords: Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Koskinen, Yrjo & Rebello, Michael J. & Wang, Jun, 2006.
"Market Coditions and Venture Capitalist Experience in Start-Up Financing ,"
SIFR Research Report Series
45, Institute for Financial Research.
[Downloadable!]
Acharya, Viral V & Bisin, Alberto, 2003.
"Optimal Financial Market Integration and Security Design ,"
CEPR Discussion Papers
3852, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions: Axelson, Ulf, 2005.
"Security Design with Investor Private Information ,"
SIFR Research Report Series
37, Institute for Financial Research.
[Downloadable!]
Bruno Biais & Thomas Mariotti, 2003.
"Strategic Liquidity Supply and Security Design ,"
STICERD - Theoretical Economics Paper Series
445, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
[Downloadable!]
Other versions:
Biais, Bruno & Mariotti, Thomas, 2003.
"Strategic Liquidity Supply and Security Design ,"
IDEI Working Papers
160, Institut d'Économie Industrielle (IDEI), Toulouse, revised Mar 2004.
[Downloadable!] Biais, Bruno & Mariotti, Thomas, 2002.
"Strategic Liquidity Supply and Security Design ,"
CEPR Discussion Papers
3369, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Bruno Biais & Thomas Mariotti, 2005.
"Strategic Liquidity Supply and Security Design ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 72(3), pages 615-649, 07.
[Downloadable!] (restricted) Allen N. Berger & Gregory F. Udell, 2001.
"Small business credit availability and relationship lending: the importance of bank organizational structure ,"
Finance and Economics Discussion Series
2001-36, Board of Governors of the Federal Reserve System (U.S.).
[Downloadable!]
Other versions: Inderst, Roman & Mueller, Holger M, 2005.
"Keeping the Board in the Dark: CEO Compensation and Entrenchment ,"
CEPR Discussion Papers
5315, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Thomas H. Noe & Stephen D. Smith, 1997.
"The buck stops where? The role of limited liability in economics ,"
Economic Review ,
Federal Reserve Bank of Atlanta, issue Q 1, pages 46-56.
[Downloadable!]
Qi Quan & Nancy Huyghebaert, 2005.
"Share Issuing Privatizations in China: Determinants of Public Share Allocation and Underpricing ,"
LICOS Discussion Papers
16205, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven.
[Downloadable!]
Dan Covitz & Paul Harrison, 2000.
"The timing of debt issuance and rating migration: theory and evidence ,"
Finance and Economics Discussion Series
2000-10, Board of Governors of the Federal Reserve System (U.S.).
[Downloadable!]
Axelson, Ulf & Strömberg, Per Johan & Weisbach, Michael, 2007.
"Why are Buyouts Leveraged? The Financial Structure of Private Equity Firms ,"
CEPR Discussion Papers
6133, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
David J. Brophy & Wassim Mourtada, 1999.
"Equity finance and the economic transition of rural America : a new framework for private-sector initiatives and positive economic public policy ,"
Proceedings – Rural Conferences ,
Federal Reserve Bank of Kansas City, issue Aug, pages 107-164.
[Downloadable!]
Anton Miglo, 2008.
"Project financing versus corporate financing under asymmetric information ,"
Working Papers
0812, University of Guelph, Department of Economics.
[Downloadable!]
Koskinen, Yrjö & Rebello, Michael & Wang, Jun, 2006.
"Venture Capital Financing: The Role of Bargaining Power and the Evolution of Informational Asymmetry ,"
CEPR Discussion Papers
5806, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Inderst, Roman & Mueller, Holger M, 2005.
"Informed Lending and Security Design ,"
CEPR Discussion Papers
5185, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Anton Miglo, 2006.
"Debt-equity choice as a signal of earnings profile over time ,"
Working Papers
0607, University of Guelph, Department of Economics.
[Downloadable!]
Other versions: Gautam Goswami & Milind Shrikhande, 1997.
"Interest rate swaps and economic exposure ,"
Working Paper
97-6, Federal Reserve Bank of Atlanta.
[Downloadable!]
Inderst, Roman & Mueller, Holger M, 2003.
"Credit Risk Analysis and Security Design ,"
CEPR Discussion Papers
3686, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Ulf Axelson & Per Stromberg & Michael S. Weisbach, 2007.
"Why are Buyouts Levered: The Financial Structure of Private Equity Funds ,"
NBER Working Papers
12826, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Axelson, Ulf & Stromberg, Per & Weisbach, Michael S., 2008.
"Why Are Buyouts Levered? The Financial Structure of Private Equity Funds ,"
Working Paper Series
2008-15, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
[Downloadable!] Axelson, Ulf & Strömberg, Per & Weisbach, Michael S., 2007.
"Why are Buyouts Levered? The Financial Structure of Private Equity Funds ,"
SIFR Research Report Series
49, Institute for Financial Research.
[Downloadable!] Ulf Axelson & Per Strömberg & Michael S. Weisbach, 2009.
"Why Are Buyouts Levered? The Financial Structure of Private Equity Funds ,"
Journal of Finance ,
American Finance Association, vol. 64(4), pages 1549-1582, 08.
[Downloadable!] (restricted) Peter M. DeMarzo & Ilan Kremer & Andrzej Skrzypacz, 2004.
"Bidding With Securities: Auctions and Security Design ,"
NBER Working Papers
10891, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Andrzej Skrzypacz & Peter M. DeMarzo & Ilan Kremer, 2004.
"Bidding with Securities: Auctions and Security Design ,"
Econometric Society 2004 North American Winter Meetings
637, Econometric Society.
Andrzej Skrzypacz & Peter M. DeMarzo & Ilan Kremer, 2004.
"Bidding with Securities: Auctions and Security Design ,"
Econometric Society 2004 North American Winter Meetings
641, Econometric Society.
Peter M. DeMarzo & Ilan Kremer & Andrzej Skrzypacz, 2005.
"Bidding with Securities: Auctions and Security Design ,"
American Economic Review ,
American Economic Association, vol. 95(4), pages 936-959, September.
[Downloadable!] Miglo, Anton & Zenkevich, Nikolay, 2005.
"Non-hierarchical signalling: two-stage financing game ,"
MPRA Paper
1264, University Library of Munich, Germany, revised 2006.
[Downloadable!]
Other versions: Miglo, Anton, 2006.
"Debt-equity choice as a signal of profit profile over time ,"
MPRA Paper
1283, University Library of Munich, Germany.
[Downloadable!]
Anton Miglo, 2006.
"Optimal compensation contracts under asymmetric information concerning expected earnings ,"
Working Papers
0613, University of Guelph, Department of Economics.
[Downloadable!]
Access and
download statistics Did you know? IDEAS also indexes book chapters .
This page was last updated on 2009-11-19.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .