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Equilibrium corporate finance

Author

Listed:
  • 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.

Suggested Citation

  • Guido Ruta & Piero Gottardi, 2009. "Equilibrium corporate finance," 2009 Meeting Papers 149, Society for Economic Dynamics.
    • Handle: RePEc:red:sed009:149
    as

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    References listed on IDEAS

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    Cited by:

    1. 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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