Public policy and venture capital financed innovation: a contract design approach : [Version May 2005]

  • The effects of public policy programmes which aim at internalising spill-overs due to successful innovation are analysed in a sequential double-sided moral hazard double-sided adverse selection framework. The central focus lies in analysing their impact on contract design. We show that in our framework only ex post grants are a robust instrument for implementing the first-best situation, whereas the success of guarantee programmes, ex ante grants and some public-private partnerships depends strongly on the characteristics of the project: in certain cases they not only give no further incentives but even destroy contract mechanisms and so worsen the outcome.

Download full text files

Export metadata

Additional Services

Share in Twitter Search Google Scholar
Author:Julia Hirsch
Parent Title (English):London School of Economics and Political Science: RICAFE working paper ; No. 23
Publisher:London School of Economics and Political Science
Place of publication:London
Document Type:Working Paper
Year of Completion:2005
Year of first Publication:2005
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2014/12/01
Tag:asymmetric information; contract design; moral hazard; public policy; venture capital
GND Keyword:Öffentliche Ordnung; Risikokapital; Moral Hazard; Asymmetrische Information
Issue:May 2005
Page Number:50
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht