The irreversibility effect and agency conflicts

Clemens Löffler (), Thomas Pfeiffer () and Georg Schneider ()

Theory and Decision, 2013, vol. 74, issue 2, 219-239

Abstract: This paper studies the influence of agency conflicts on the irreversibility effect. Using a dynamic variant of the static Baron and Myerson (Econometrica 50(4):911–930, 1982 ) adverse selection model, we characterize under which circumstances the irreversibility effect arises in the presence and absence of an agency conflict. In particular, we find that in the presence of an agency conflict the irreversibility effect arises in more circumstances than in the standard first-best analysis that abstracts from agency problems. Copyright Springer Science+Business Media New York 2013

Keywords: Irreversibility effect; Irreversible decisions; Uncertainty; Agency conflicts (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:theord:v:74:y:2013:i:2:p:219-239

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DOI: 10.1007/s11238-012-9331-6

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