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Equilibrium corporate finance

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Author Info

  • Guido Ruta

    (NYU)

  • Piero Gottardi

    (EUI Firenze)

Abstract

In the final sections of the paper we introduce informational asymmetries between the decision maker in the firm (e.g., the manager) and shareholders or equityholders, as in standard corporate finance models. We show that the unanimity and constrained efficiency properties continue to hold with asymmetric information. This is the case both with moral hazard and adverse selection.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2009 Meeting Papers with number 149.

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Date of creation: 2009
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Handle: RePEc:red:sed009:149

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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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References

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Cited by:
  1. Britz Volker & Herings Jean-Jacques & Predtetchinski Arkadi, 2010. "Theory of the Firm: Bargaining and Competitive Equilibrium," Research Memorandum 057, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
  2. Oren Levintal, 2012. "Equity Capital, Bankruptcy Risk and the Liquidity Trap," Working Papers 2012-07, Bar-Ilan University, Department of Economics.

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