Real options in a dynamic agency model, with applications to financial development, IPOs, and business risk
By: Thomas Philippon, Yuliy Sannikov.
Contributors: Sannikov, Yuliy.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 13584.; Working paper series (National Bureau of Economic Research) -- working paper no. 13584.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 31
Subjects: Corporations -- Finance -- Econometric models; Going public (Securities)
Description: We study investment options in a dynamic agency model. Moral hazard creates an option to wait and agency conflicts affect the timing of investment. The model sheds light, theoretically and quantitatively, on the evolution of firms' dynamics, in particular the decline of the failure rate and the decrease in the age of IPOs.
Notes: "November 2007"

Includes bibliographical references (p. 29-31).

Also available in PDF from the NBER world wide web site (www.nber.org).