IDEAS home Printed from https://ideas.repec.org/p/wop/ohstfi/_021.html
   My bibliography  Save this paper

Properties of Economic Income in a Private Information Setting

Author

Listed:
  • Richard A. Young
  • Mitchell Farlee
  • John Fellingham

Abstract

This paper adopts a valuation perspective within an asymmetric information setting and explores properties of economic income. The optimal intertemporal contract induces an accrual component of income which would not exist absent the information problem. The contracting solution introduces a dampening effect -- if cash flow increases by one dollar, income increases by less than one dollar. Thus, the accrual is inversely related to cash flows. Further, this dampening is greater for more favorable cash outcomes.

Suggested Citation

  • Richard A. Young & Mitchell Farlee & John Fellingham, "undated". "Properties of Economic Income in a Private Information Setting," Corporate Finance & Organizations _021, Ohio State University.
    • Handle: RePEc:wop:ohstfi:_021
    as

    Download full text from publisher

    File URL: http://www.cob.ohio-state.edu/~young/EconInc.11.95.doc
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wop:ohstfi:_021. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/dfohsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.