Public policy and venture capital financed innovation: a contract design approach : [This version February 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.

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Author:Julia Hirsch
Document Type:Report
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:This version February 2005
Page Number:49
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