Investment Behavior of Myopic Agent under Asymmetry Information
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Abstract:
The investment behavior distortion of myopic agent with asymmetry information has remained unsolved,the BS characterization of the inefficiency from managerial myopic hinges on a restrictive informational assumption and therefore is not generally applicable. Paul demonstrates that it is not necessarily true that hidden-action type leads to under-investment in long-run projects. We examine the hidden-information type and arrive on analysis:in general,over-investment in the long-run project can be ensured only if the manager has more information than the stock market about the long-run project,but not about the short-run project.
