A multistage game theoretic analysis of double moral hazard in venture capital investment
Current studies on moral hazard in venture capital mainly focus on the entrepreneurs, but ignore that moral hazard also show itself for venture capitalists. This study analyzes double moral hazard problem between venture capitalists and entrepreneurs using multistage dynamic game theoretic model. Aiming at the special double-sided moral hazard problems in venture capital build on the Ramy Elitzur Model, we introduced two important parameters-one is the impact of venture capitalists effort level on new enterprise invested, and the other involves the venture capitalists cost of effort. The contribution of our study lies in that we analyze the optimal incentive compensation contract between venture capitalists and entrepreneurs, factors which affects contract design, and venture capitalists optimal exit point, etc. The new model offers a more realistic understanding for venture capital investment process than the original one and is also relevant for the venture capital practice in China.
double moral hazard game theory stage investment venture capital
ZHANG Shi-di WEI Dong-xu
School of Management,Graduate University of Chinese Academy of Sciences,100190,P.R.China
国际会议
International Symposium on Financial Engineering and Risk Management(2008年金融工程与风险管理)
上海
英文
87-92
2008-06-01（万方平台首次上网日期，不代表论文的发表时间）