Essays in risk and public externalities
Abstract/Contents
- Abstract
- Over the past fifty years, financial and legal theory have predicted that owners of firms may have incentives to take risks that have positive expected value from the perspective of firms' equity holders but negative expected value from the perspective of total firm value and of society as a whole. These incentives stem from the fact that a firm's equity holders can enjoy potentially unlimited upside payoffs when risks turn out well, but have capped downside payoffs equal to the value of their equity holdings. Theory also predicts that the lower the value of those equity holdings (relative to total firm assets), the more pronounced these incentive effects may become. This dissertation encompasses three pieces of research that investigate these theoretical matters empirically. The investigations provide empirical evidence amongst banks and amongst industrial firms that as the value of equity (relative to assets) decreases, socially sub-optimal risk-taking increases. The investigations also provide empirical evidence that when a legal change increases the extent to which industrial firms' creditors will bear losses on account of harms that a bankruptcy debtor has caused to third parties, those creditors can exert their influence on borrowers to constrain their socially inefficient risk-taking.
Description
| Type of resource | text |
|---|---|
| Form | electronic resource; remote; computer; online resource |
| Extent | 1 online resource. |
| Place | California |
| Place | [Stanford, California] |
| Publisher | [Stanford University] |
| Copyright date | 2019; ©2019 |
| Publication date | 2019; 2019 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Author | Ohlrogge, Michael John |
|---|---|
| Degree supervisor | Giesecke, Kay |
| Thesis advisor | Giesecke, Kay |
| Thesis advisor | Donohue, John J III, 1953- |
| Thesis advisor | Pelger, Markus |
| Degree committee member | Donohue, John J III, 1953- |
| Degree committee member | Pelger, Markus |
| Associated with | Stanford University, Department of Management Science and Engineering. |
Subjects
| Genre | Theses |
|---|---|
| Genre | Text |
Bibliographic information
| Statement of responsibility | Michael Ohlrogge. |
|---|---|
| Note | Submitted to the Department of Management Science and Engineering. |
| Thesis | Thesis Ph.D. Stanford University 2019. |
| Location | electronic resource |
Access conditions
- Copyright
- © 2019 by Michael John Ohlrogge
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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