Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25495
Authors: 
Hirsch, Julia
Year of Publication: 
2006
Series/Report no.: 
CFS Working Paper 2006/29
Abstract: 
The effects of public policy programs which aim at internalizing spill-overs due to successful innovation are analyzed in a sequential double-sided moral hazard doublesided adverse selection framework. The central focus lies in analyzing their impact on contract design. We show that in our framework only ex post grants are a robust instrument for implementing the first-best situation, whereas the success of guarantee programs, ex ante grants and some types of investment grants depends strongly on the characteristics of the project: in certain cases they not only give no further incentives but even destroy contract mechanisms and so worsen the outcome.
Subjects: 
Public Policy
Contract Design
Venture Capital
Moral Hazard
Asymmetric Information
JEL: 
D82
G24
G32
H25
H81
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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