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Irreversible investment, managerial discretion and optimal capital structure

✍ Scribed by Andreas Andrikopoulos


Book ID
116615299
Publisher
Elsevier Science
Year
2009
Tongue
English
Weight
263 KB
Volume
33
Category
Article
ISSN
0378-4266

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## Abstract This paper analyzes whether it might be desirable for a firm to hire an overoptimistic manager to commit to a certain R&D strategy. I consider a Cournot model with an ex‐ante R&D stage where firms can invest in cost reduction before product market competition takes place. I show that fi