About: Financing of competing projects with venture capital

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rdf:type	skos:Concept http://linked.opendata.cz/ontology/domain/vavai/Vysledek
Description	We analyze innovation races in a moral hazard setting. We develop a model where two competing entrepreneurs work independently on the same project. The entrepreneurs do not possess any wealth of their own and their research is financed by a venture capitalist. The project, if successful, generates a prize, which is to be shared between the winning entrepreneur and the venture capitalist. The venture capitalist cannot observe the allocation of funds he provides, which creates a moral hazard problem. We compare a competitive setting with a benchmark case where the venture capitalist finances only one entrepreneur. We show that the venture capitalist can increase the efficiency of research (hence, his own expected profit from investments) and alleviate the moral hazard problem, if he finances both entrepreneurs. This conclusion is unambiguous, when the entrepreneurs are at the same stage of R&D. Moreover, it holds for a large range of parameters also when the entrepreneurs are at the different stages of R&D, so that one of them is the leader in the innovation race and the other is the follower. We analyze innovation races in a moral hazard setting. We develop a model where two competing entrepreneurs work independently on the same project. The entrepreneurs do not possess any wealth of their own and their research is financed by a venture capitalist. The project, if successful, generates a prize, which is to be shared between the winning entrepreneur and the venture capitalist. The venture capitalist cannot observe the allocation of funds he provides, which creates a moral hazard problem. We compare a competitive setting with a benchmark case where the venture capitalist finances only one entrepreneur. We show that the venture capitalist can increase the efficiency of research (hence, his own expected profit from investments) and alleviate the moral hazard problem, if he finances both entrepreneurs. This conclusion is unambiguous, when the entrepreneurs are at the same stage of R&D. Moreover, it holds for a large range of parameters also when the entrepreneurs are at the different stages of R&D, so that one of them is the leader in the innovation race and the other is the follower. (en)
Title	Financing of competing projects with venture capital (en) Financing of competing projects with venture capital
skos:prefLabel	Financing of competing projects with venture capital (en) Financing of competing projects with venture capital
skos:notation	RIV/00216208:11640/07:00394408!RIV14-MSM-11640___
http://linked.open...avai/riv/aktivita	P Z
http://linked.open...avai/riv/aktivity	P(KJB708020501), Z(MSM0021620846)
http://linked.open...vai/riv/dodaniDat	2014
http://linked.open...aciTvurceVysledku	Kováč, Eugen
http://linked.open.../riv/druhVysledku	O - Ostatní výsledky nezařaditelné do žádného z výše uvedených druhů výsledku
http://linked.open...iv/duvernostUdaju	S - Úplné a pravdivé údaje nepodléhající ochraně podle zvláštních právních předpisů
http://linked.open...titaPredkladatele	Univerzita Karlova v Praze / Centrum pro ekonomický výzkum a doktorská studia
http://linked.open...dnocenehoVysledku	421964
http://linked.open...ai/riv/idVysledku	RIV/00216208:11640/07:00394408
http://linked.open...riv/jazykVysledku	eng - angličtina
http://linked.open.../riv/klicovaSlova	venture capital; moral hazard; optimal contract (en)
http://linked.open.../riv/klicoveSlovo	optimal contract moral hazard venture capital
http://linked.open...ontrolniKodProRIV	[BC04BE031612]
http://linked.open...in/vavai/riv/obor	AH
http://linked.open...ichTvurcuVysledku	1 (xsd:int)
http://linked.open...cetTvurcuVysledku	2 (xsd:int)
http://linked.open...vavai/riv/projekt	Financing of competing projects with venture capital
http://linked.open...UplatneniVysledku	2007
http://linked.open...iv/tvurceVysledku	Kováč, Eugen Goldfain, E.
http://linked.open...n/vavai/riv/zamer	Ekonomické dopady evropské integrace na ČR
http://localhost/t...ganizacniJednotka	11640

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