ELFAKIR, Adil, LAMRANI ALAOUI, Youssef, TKIOUAT, Mohamed and AMER, Zaid (2020). Moral Hazard Reduction in Entrepreneurial Financing An application to Profit and Loss Sharing Contracts. In: BAM 2020 conference in the cloud proceedings. British Academy of Management.
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Abstract
In profit and loss sharing contracts, profits are shared according to a specific ratio while losses are shared according to each partner contribution ration in the project’s capital. We aim to reduce entrepreneurial effort shirking in a profit and loss sharing contract involving a VC and an entrepreneur. We use a game theoretic approach and try to find the profit-sharing ratio that would reduce the moral hazard risk of effort shirking. The game theoretic approach allows for the development of a profit-sharing ratio span of negotiation that fulfil both the incentive and participative constraints of the PLS participants
Item Type: | Book Section |
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SWORD Depositor: | Symplectic Elements |
Depositing User: | Symplectic Elements |
Date Deposited: | 19 May 2020 14:13 |
Last Modified: | 17 Mar 2021 20:31 |
URI: | https://shura.shu.ac.uk/id/eprint/26354 |
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