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Hold-up Problem
In economics, the hold-up problem is central to the theory of incomplete contracts, and shows the difficulty in writing complete contracts. A hold-up problem arises when two factors are present: # Parties to a future transaction must make noncontractible relationship-specific investments before the transaction takes place. # The specific form of the optimal transaction (such as quality-level specifications, time of delivery, what quantity of units) cannot be determined with certainty beforehand.Rogerson, W.P. (1992). Contractual Solutions to the Hold-Up Problem. ''The Review of Economic Studies, 4''(59), 777-793. The hold-up problem is a situation where two parties may be able to work most efficiently by cooperating but refrain from doing so because of concerns that they may give the other party increased bargaining power and thus reduce their own profits. When party A has made a prior commitment to a relationship with party B, the latter can 'hold up' the former for the val ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Eric Maskin
Eric Stark Maskin (born December 12, 1950) is an American economist and mathematician. He was jointly awarded the 2007 Nobel Memorial Prize in Economic Sciences with Leonid Hurwicz and Roger Myerson "for having laid the foundations of mechanism design theory". He is the Adams University Professor and Professor of Economics and Mathematics at Harvard University. Until 2011, he was the Albert O. Hirschman Professor of Social Science at the Institute for Advanced Study, and a visiting lecturer with the rank of professor at Princeton University.Economics professor wins Nobel – The Daily Princetonian Early life and education Maskin was born in |
Strip Financing
Strip financing is the repackaging of different types of obligations—debt, preferred stock, common stock etc.—into one security. The idea is to ease conflicts of interest and agency costs between the holders of the initial components, bond and stockholders. In deals that are strip financed, returns to investors are generally derived from their equity positions (seen through how investors from time to time take losses on the debt components of the strip). Therefore, in a situation where a company is acquired through a strip-financed deal, and that company begins to default on loans, investors are more willing to renegotiate lending terms, thus avoiding the hold-up problem often seen in prior to and during bankruptcy. Also, repackaging can raise a securities' liquidity. One popular form developed in Canada was the Income Trust, which combined income from a high yield bond with a stock dividend. Beginning in 2003 this concept was expanded to the U.S. when "Income Deposit Secu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Earnout
Earnout or earn-out refers to a pricing structure in mergers and acquisitions where the sellers must "earn" part of the purchase price based on the performance of the business following the acquisition. Earnouts are often employed when the buyer(s) and seller(s) disagree about the expected growth and future performance of the target company. A typical earnout takes place over a three to five-year period after closing of the acquisition and may involve anywhere from ten to fifty percent of the purchase price being deferred over that period. Buyers usually value companies based on historical performance while sellers may weight more heavily projections about higher growth prospects. With an earnout the seller's shareholders are paid an additional sum if some predefined performance targets are met. (See contingent value rights, having a similar function.) Earnouts are popular among private equity investors, who do not necessarily have the expertise to run a target business after clos ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Contingent Value Rights
In corporate finance, Contingent Value Rights (CVR) are rights granted by an acquirer to a company’s shareholders, facilitating the transaction where some uncertainty is inherent. CVRs may be separately tradeable securities; they are occasionally acquired (or shorted) by specialized hedge funds. Forms These rights typically take either of two forms: (1) Event-driven CVRs compensate the owners for yet to eventuate positive developments in their business - hence protecting the acquirer against the valuation risk inherent in overpaying. (2) Price-protection CVRs are granted when payment is share based - protecting the acquired company, by providing a hedge against downside price risk in the acquirer's equity. In the first case, CVRs are granted Motley Fool (2018)''What Is a Contingent Value Right?''/ref> in scenarios in which the acquiring company does not wish to pay for a product that might not work, has a limited market, or might need significant investment; wherea ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Commitment Device
A commitment device is, according to journalist Stephen J. Dubner and economist Steven Levitt, a way to lock oneself into following a plan of action that one might not want to do, but which one knows is good for oneself. In other words, a commitment device is a way to give oneself a reward or punishment to make what might otherwise become an empty promise stronger and believable. A commitment device is a technique where someone makes it easier for themselves to avoid akrasia (acting against one's better judgment), particularly procrastination. Commitment devices have two major features. They are voluntarily adopted for use and they tie consequences to follow-through failures. Consequences can be immutable (irreversible, such as a monetary consequence) or mutable (allows for the possibility of future reversal of the consequence). Overview The term "commitment device" is used in both economics and game theory. In particular, the concept is relevant to the fields of economics an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Sanford J
Sanford may refer to: People *Sanford (given name), including a list of people with the name *Sanford (surname), including a list of people with the name Places United States * Sanford, Alabama, a town in Covington County * Sanford, Colorado, a statutory town in Conejos County * Sanford, Florida, the county seat of Seminole County ** Orlando Sanford International Airport, in Sanford, Florida * Sanford, Georgia, an unincorporated community * Sanford, Kansas, an unincorporated community in Pawnee County * Sanford, Maine, a city in York County ** Sanford (CDP), Maine, a former census-designated place in downtown Sanford * Sanford, Michigan, a village in Midland County * Sanford, Mississippi, an unincorporated community in Covington County * Sanford, New York, a town in Broome County * Sanford, North Carolina, a city in Lee County * Sanford, Texas, a town in Hutchinson County * Sanford, Virginia, a census-designated place in Accomack County * Mount Sanford (Alaska), a shi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Merger
Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorption, a merger, a tender offer or a hostile takeover. As an aspect of strategic management, M&A can allow enterprises to grow or downsize, and change the nature of their business or competitive position. Technically, a is the legal consolidation of two business entities into one, whereas an occurs when one entity takes ownership of another entity's share capital, equity interests or assets. From a legal and financial point of view, both mergers and acquisitions generally result in the consolidation of assets and liabilities under one entity, and the distinction between the two is not always clear. Most countries require mergers and acquisitions to comply with antitrust or competition law. In the United States, for example, the Clayt ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Vertical Integration
In microeconomics, management and international political economy, vertical integration, also referred to as vertical consolidation, is an arrangement in which the supply chain of a company is integrated and owned by that company. Usually each member of the supply chain produces a different Product (business), product or (market-specific) service, and the products combine to satisfy a common need. It contrasts with horizontal integration, wherein a company produces several items that are related to one another. Vertical integration has also described management styles that bring large portions of the supply chain not only under a common ownership but also into one corporation (as in the 1920s when the Ford River Rouge complex began making much of its own steel rather than buying it from suppliers). Vertical integration can be desirable because it secures supplies needed by the firm to produce its product and the market needed to sell the product, but it can become undesirable wh ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Option Contract
An option contract, or simply option, is defined as "a promise which meets the requirements for the formation of a contract and limits the promisor's power to revoke an offer". Option contracts are common in relation to property (see below) and in professional sports. An option contract is a type of contract that protects an offeree from an offeror's ability to revoke their offer to engage in a contract. Under the common law, consideration for the option contract is required as it is still a form of contract, cf. Restatement (Second) of Contracts § 87(1). Typically, an offeree can provide consideration for the option contract by paying money for the contract or by providing value in some other form such as by rendering other performance or forbearance. Courts will generally try to find consideration if there are any grounds for doing so. See consideration for more information. The Uniform Commercial Code (UCC) has eliminated a need for consideration for firm offers between me ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Klaus M
Klaus is a German, Dutch and Scandinavian given name and surname. It originated as a short form of Nikolaus, a German form of the Greek given name Nicholas. Notable persons whose family name is Klaus * Billy Klaus (1928–2006), American baseball player *Chris Klaus (born 1973), American entrepreneur *Felix Klaus (born 1992), German football player, son of Fred Klaus * Frank Klaus (1887–1948), German-American boxer, 1913 Middleweight Champion * Fred Klaus (born 1967), German football player and manager, father of Felix Klaus *Josef Klaus (1910–2001), Chancellor of Austria 1966–1970 *Karl Ernst Claus (1796–1864), Russian chemist *Václav Klaus (born 1941), Czech politician, former President of the Czech Republic * Walter K. Klaus (1912–2012), American politician and farmer Notable persons whose given name is Klaus * Brother Klaus, Swiss patron saint *Klaus Augenthaler (born 1957), German football player and manager *Klaus Badelt (born 1967), German composer *Klaus B ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
Georg Nöldeke
Georg Nöldeke (born November 19, 1964) is an economist and currently serves as Professor of Economics at the University of Basel. His research interests focuses on microeconomic theory, game theory, and social evolution. In 2007, Georg Nöldeke's contributions to economics of information - in particular on the communication within financial markets - as well as to game theory and contract theory were awarded the Gossen Prize by the German Economic Association. Biography After having spent his undergraduate studies at the University of Bonn and at the University of California, Berkeley, Georg Nöldeke earned a diploma in economics from the University of Bonn in 1988. In 1992, after graduate studies at the University of Bonn and at the London School of Economics, he further earned a Ph.D. from the former while simultaneously working there as a teaching and research assistant (1989–92). Following his studies, he became an assistant professor of economics at Princeton University ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] [Amazon] |
