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SUMMARY:Cash and Dynamic Agency
DTSTART:20140919T103000
DTEND:20140919T120000
DTSTAMP:20260408T082850Z
UID:d6df7a1a261295eb0832d81fe944c228caf5ac50934138d5ccbc8b65
CATEGORIES:Conferences - Seminars
DESCRIPTION:Barney HARTMAN-GLASER (UCLA)\nWe present an agency model of ca
 sh dynamics within a firm. An investor contracts with a manager to operate
  a firm but faces two key frictions in doing so. First\, the manager can d
 ivert cash for her own consumption by underreporting cash flow to the inve
 stor. Second\, The investor has limited liability and cannot costly transf
 er cash into the firm to cover cash flow shortfalls. This second friction 
 implies that the investor must allow cash to accumulate within the firm. H
 owever\, the first friction implies that the firm cannot maintain too high
  a cash stock\, lest the manager divert. In some cases\, the optimal contr
 act can be implemented via performance sensitive debt. In all cases\, the 
 payouts to the investors are given by a rate per unit of time\, while payo
 uts to the manager are lumpy. Conditional on making payouts to the investo
 rs\, the firm pays the investor at higher rate the lower the cash balance.
  Cash constrained firms may choose to begin operations by ceding more surp
 lus to the manager to decrease the probability of liquidation.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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