Optimal Organization in a Sequential Investment Problem with the Principal's Cancellation Option

Optimal organization in a sequential investment problem with the principal's cancellation option

International Journal of Industrial Organization ◽

10.1016/j.ijindorg.2006.07.003 ◽

2007 ◽

Vol 25 (3) ◽

pp. 631-641 ◽

Cited By ~ 11

Author(s):

Yasunari Tamada ◽

Tsung-Sheng Tsai

Keyword(s):

Optimal Organization ◽

Investment Problem

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Sequential Investments, Know-How Transmission, and Optimal Organization

The B E Journal of Theoretical Economics ◽

10.2202/1935-1704.1748 ◽

2011 ◽

Vol 11 (1) ◽

Cited By ~ 1

Author(s):

Tsung-Sheng Tsai ◽

Sheng-Chiao Kung

Keyword(s):

Single Agent ◽

Final Outcome ◽

Two Stage ◽

Know How ◽

Optimal Organization ◽

Second Stage ◽

Transmission Cost ◽

Investment Problem ◽

Information Rent

In a two-stage sequential investment problem, a principal can use either a single agent or two separate agents to execute the project. The final outcome of the project depends upon both the agent's investments and the first-stage outcome. The principal wishes to stop the project when the first stage is a failure; however, she may not know the first-stage outcome, so that she has to pay the agent a rent to extract that information. Furthermore, the first-stage agent can transmit his know-how to the second-stage agent. Although there is a transmission cost under separate agency while there is no cost under single agency, single agency is not always optimal. This is because the transmission cost can reduce the agent's incentive to continue the project so that the information rent can be lower under separate agency. Hence, the principal may prefer separate agency more even when the transmission cost becomes larger.

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PROJECTIVE ACTIVITY APPROACH TO SPATAL MANAGEMENT OF NATURAL RESOURCE ASSETS

Environmental Economics and Sustainable Development ◽

10.37100/2616-7689/2018/3-4(22-23)/8 ◽

2018 ◽

pp. 63-70

Author(s):

Igor Bystryakov ◽

Dmitry Klynovyi

Keyword(s):

Natural Resource ◽

Economic Activity ◽

Business Processes ◽

Public Welfare ◽

Investment Projects ◽

Optimal Organization ◽

Spatial Management ◽

Business Ecosystems ◽

Individual Value

The aim of the article is determination of system signs of the projective approach to the spatial management of natural resource assets in business-ecosystems through a competition and collaboration of management entities, with maximization of public welfare due to optimal organization of business processes in physical, informative and financial spaces. It is exposed a difference between projective-activity and economic-activity approaches as the displacement of administrative attention from an enterprise on a product, through realization of investment projects by totality of productive and logistic enterprises with creation its shared value, that exceeds individual value, created by a separate enterprise.

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