Toward a Theory of Asset Subscription

Danyang Xie
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Danyang Xie: International Monetary Fund

Finance from EconWPA

Abstract: This paper develops an understanding toward a theory of asset subscription. When a firm needs to raise cash from an asset that is too large or too risky for a single individual or financial institution so that an auction method is not applicable, the firm may use a subscription scheme. In this paper, we discuss a Nash subscription (NS) scheme and a sequential subscription (SS) scheme. We characterize the optimal strategy when the value of the asset is known. The comparison between a NS and a SS is provided. The difference between an auction scheme and a subscription scheme is discussed.

Keywords: Nash subscription; sequential subscription; auction (search for similar items in EconPapers)
JEL-codes: D43 D44 G12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fin and nep-mac
Date: 2003-03-03
Note: Type of Document - PDF; prepared on IBM PC; to print on HP;
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpfi:0303001

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