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Navigable Slide Index

1. Introduction
2. Ex ante information asymmetry
3. Example model Nachman and Noe (1994)
4. Securities
5. Actions and beliefs
6. Valuation
7. Ent. payoffs
8. Strategies
9. Investors
10. Perfect Bayesian Equilibrium (PBE)
11. Problem: to many PBES
12. Use a refinement of PBE, D1 (Cho & Kreps)
13. Consequences of the D1 refinement
14. Mathematics of security design
15. The dual problem
16. Solution
17. Conditional stochastic dominance (CSD)
18. Stochastic dominance vs. CSD
19. Debt and stochastic dominance
20. Example where debt is not optimal design

Topics Covered

• Ex ante information asymmetry
• Example model (Nachman & Noe 1994)
• Securities
• Actions and beliefs
• Valuation
• Entrepreneur payoffs and strategies
• Investor beliefs and price assignment
• Perfect Bayesian Equilibrium (PBE)
• D1 refinement of PBE (Cho & Kreps)
• Mathematics of security design
• The dual problem and solution
• Stochastic dominance and debt
• Conditional stochastic dominance

Links

Series:

• Corporate Financing

Categories:

• Finance, Accounting & Economics

Talk Citation

Publication History

• Published on October 7, 2014