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Printable Handouts
Navigable Slide Index
- Introduction
- Ex ante information asymmetry
- Example model Nachman and Noe (1994)
- Securities
- Actions and beliefs
- Valuation
- Ent. payoffs
- Strategies
- Investors
- Perfect Bayesian Equilibrium (PBE)
- Problem: to many PBES
- Use a refinement of PBE, D1 (Cho & Kreps)
- Consequences of the D1 refinement
- Mathematics of security design
- The dual problem
- Solution
- Conditional stochastic dominance (CSD)
- Stochastic dominance vs. CSD
- Debt and stochastic dominance
- Example where debt is not optimal design
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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
Talk Citation
Noe, T. (2014, October 7). Security Design 2 [Video file]. In The Business & Management Collection, Henry Stewart Talks. Retrieved December 22, 2024, from https://doi.org/10.69645/WMVE6303.Export Citation (RIS)
Publication History
Security Design 2
Published on October 7, 2014
32 min