Model for Design of Portfolio Venture Investment Contract When Taking Moral Hazards into Account
Joint Authors
Source
Issue
Vol. 2020, Issue 2020 (31 Dec. 2020), pp.1-6, 6 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2020-08-25
Country of Publication
Egypt
No. of Pages
6
Main Subjects
Abstract EN
Portfolio investment is adopted by the venture capital to diversify those risks involved in project selection, investing or operating so that the venture capitalist can expect a relatively stable income and lower financing risks.
Based on the design of portfolio investment contract with unlimited funds developed by Kanniainen and Keuschnigg, and Inderst et al., this article makes a modification and presents a model given the limitation of funds available for the venture capitalist.
It is demonstrated that the marginal benefit of efforts paid by the entrepreneurs exceeds the marginal cost, given the limitation of funds available, which will conduce to a high-level engagement of the entrepreneurs.
Thus, by adopting the design of renegotiation contract, the venture capitalist can manage to stimulate the entrepreneurs to make efforts, which is to result in moral hazard reduction.
American Psychological Association (APA)
Yin, L.& Liu, Y.& Wang, Z.. 2020. Model for Design of Portfolio Venture Investment Contract When Taking Moral Hazards into Account. Scientific Programming،Vol. 2020, no. 2020, pp.1-6.
https://search.emarefa.net/detail/BIM-1209155
Modern Language Association (MLA)
Yin, L.…[et al.]. Model for Design of Portfolio Venture Investment Contract When Taking Moral Hazards into Account. Scientific Programming No. 2020 (2020), pp.1-6.
https://search.emarefa.net/detail/BIM-1209155
American Medical Association (AMA)
Yin, L.& Liu, Y.& Wang, Z.. Model for Design of Portfolio Venture Investment Contract When Taking Moral Hazards into Account. Scientific Programming. 2020. Vol. 2020, no. 2020, pp.1-6.
https://search.emarefa.net/detail/BIM-1209155
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1209155