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Discrete Dynamics in Nature and Society
Volume 2015 (2015), Article ID 689362, 13 pages
Research Article

Multistage Effort and the Equity Structure of Venture Investment Based on Reciprocity Motivation

1Institute of Financial Mathematics, Southwestern University of Finance and Economics, Chengdu 610074, China
2School of Finance, Southwestern University of Finance and Economics, Chengdu 610074, China
3Department of Accounting, Tianfu College of Southwest University of Finance and Economics, Mianyang 621000, China
4School of Economics and Management, Wuhan University, Wuhan 430072, China

Received 27 April 2015; Revised 17 August 2015; Accepted 26 August 2015

Academic Editor: Alicia Cordero

Copyright © 2015 Chuan Ding et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


For venture capitals, it is a long process from an entry to its exit. In this paper, the activity of venture investment will be divided into multistages. And, according to the effort level entrepreneurs will choose, the venture capitalists will provide an equity structure at the very beginning. As a benchmark for comparison, we will establish two game models on multistage investment under perfect rationality: a cooperative game model and a noncooperative one. Further, as a cause of pervasive psychological preference behavior, reciprocity motivation will influence the behavior of the decision-makers. Given this situation, Rabin’s reciprocity motivation theory will be applied to the multistage game model of the venture investment, and multistage behavior game model will be established as well, based on the reciprocity motivation. By looking into the theoretical derivations and simulation studies, we find that if venture capitalists and entrepreneurs both have reciprocity preferences, their utility would have been Pareto improvement compared with those under perfect rationality.