Table of Contents Author Guidelines Submit a Manuscript
Discrete Dynamics in Nature and Society
Volume 2015 (2015), Article ID 689362, 13 pages
http://dx.doi.org/10.1155/2015/689362
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.

Linked References

  1. C. Casamatta, “Financing and advising: optimal financial contracts with venture capitalists,” Journal of Finance, vol. 58, no. 5, pp. 2059–2086, 2003. View at Publisher · View at Google Scholar · View at Scopus
  2. K. M. Schmidt, “Convertible securities and venture capital finance,” Journal of Finance, vol. 58, no. 3, pp. 1139–1166, 2003. View at Publisher · View at Google Scholar · View at Scopus
  3. Y. Chan, D. Siegel, and A. V. Thakor, “Learning, corporate control and performance requirements in venture capital contracts,” International Economic Review, vol. 31, no. 2, pp. 365–381, 1990. View at Publisher · View at Google Scholar
  4. J.-J. Zheng, P. Zhang, X.-S. Hu, and W.-L. Jiang, “Research on bidding strategy and modeling of equity auction based on stochastic differential equations,” System Engineering Theory and Practice, vol. 33, no. 4, pp. 893–900, 2013. View at Google Scholar · View at Scopus
  5. J. J. Zheng, X. Tan, and W. T. Fan, “An incentive model with stocks based on principal-agent theory,” Journal of Management Sciences in China, vol. 8, no. 1, pp. 24–29, 2005. View at Google Scholar
  6. W. X. Guo and Y. Zeng, “Double moral hazard and the theory of capital structure of venture capital financing,” Journal of Management Sciences in China, vol. 12, no. 3, pp. 119–131, 2009. View at Google Scholar
  7. J.-P. Xu and S.-J. Chen, “The study of venture capital's principal-agent model based on asymmetric information,” System Engineering Theory and Practice, vol. 24, no. 1, pp. 19–24, 2004. View at Google Scholar · View at Scopus
  8. Y. H. Jin, Y. Q. Xi, and Z. X. Ye, “Study of multi-period dynamic financial model of venture capital considering reputation,” System Engineering Theory and Practice, vol. 5, no. 8, pp. 76–80, 2003. View at Google Scholar
  9. E. Ramy and G. Arieh, “A multi-period game theoretic model of venture capitalists and entrepreneurs,” European Journal of Operational Research, vol. 144, no. 2, pp. 440–453, 2003. View at Publisher · View at Google Scholar · View at MathSciNet · View at Scopus
  10. W. A. Sahlman, “The structure and governance of venture-capital organizations,” Journal of Financial Economics, vol. 27, no. 2, pp. 473–521, 1990. View at Publisher · View at Google Scholar · View at Scopus
  11. A. Shleifer and R. W. Vishny, “Liquidation values and debt capacity: a market equilibrium approach,” The Journal of Finance, vol. 47, no. 4, pp. 1343–1366, 1997. View at Publisher · View at Google Scholar
  12. S. Dahiya and K. Ray, “Staged investments in entrepreneurial financing,” Journal of Corporate Finance, vol. 18, no. 5, pp. 1193–1216, 2012. View at Publisher · View at Google Scholar · View at Scopus
  13. R. Amit, J. Brander, and C. Zott, “Venture capital financing of entrepreneurship in Canada,” in Capital Markets Issues in Canada, P. Halpern, Ed., pp. 237–277, Industry Canada, Ottawa, Canada, 1997. View at Google Scholar
  14. P. Gompers and J. Lerner, The Venture Capital Cycle, MIT Press, Cambridge, Mass, USA, 1999.
  15. D. V. Neher, “Staged financing: an agency perspective,” Review of Economic Studies, vol. 66, no. 2, pp. 255–274, 1999. View at Publisher · View at Google Scholar · View at Scopus
  16. S. D. Zhang and D. X. Wei, “Analysis on multi-stage investment game of double moral hazard in venture capital,” Nankai Economics Studies, vol. 54, no. 6, pp. 142–150, 2008. View at Google Scholar
  17. B. Wu, X. X. Xu, and J. M. He, “Double-side moral hazard and convertible bond design in venture capital firms,” Journal of Management Sciences in China, vol. 15, no. 1, pp. 11–20, 2012. View at Google Scholar
  18. J.-E. De Bettignies and J. A. Brander, “Financing entrepreneurship: bank finance versus venture capital,” Journal of Business Venturing, vol. 22, no. 6, pp. 808–832, 2007. View at Publisher · View at Google Scholar · View at Scopus
  19. J.-E. De Bettignies, “Financing the entrepreneurial venture,” Management Science, vol. 54, no. 1, pp. 151–166, 2008. View at Publisher · View at Google Scholar · View at Scopus
  20. R. Repullo and J. Suarez, “Venture capital finance: a security design approach,” Review of Finance, vol. 8, no. 1, pp. 75–108, 2004. View at Publisher · View at Google Scholar · View at Scopus
  21. E. Fehr and K. M. Schmidt, “A theory of fairness, competition, and cooperation,” The Quarterly Journal of Economics, vol. 114, no. 3, pp. 817–868, 1999. View at Publisher · View at Google Scholar · View at Scopus
  22. M. Rabin, “Incorporating fairness into game theory and economics,” American Economic Review, vol. 83, no. 5, pp. 1281–1302, 1993. View at Google Scholar
  23. R. Fairchild, “Fairness norms and self-interest in venture capital/entrepreneur contracting and performance,” Management Online Review, 2010. View at Publisher · View at Google Scholar
  24. J. J. Zheng and J. F. Wu, “Research on moral hazard of venture entrepreneur base on the fairness preference,” Technology Economics, vol. 29, no. 8, pp. 88–92, 2010. View at Google Scholar
  25. J. J. Zheng and M. Y. Xu, “A research into venture financing contract on the basis of fairness preference,” Economic Review, no. 1, pp. 14–18, 2010. View at Google Scholar
  26. E. Fehr and A. Falk, “Psychological foundations of incentives,” European Economic Review, vol. 46, no. 4-5, pp. 687–724, 2002. View at Publisher · View at Google Scholar · View at Scopus
  27. E. Fehr and U. Fischbacher, “Why social preferences matter—the impact of non-selfish motives on competition, cooperation and incentives,” Economic Journal, vol. 112, no. 478, pp. C1–C33, 2002. View at Publisher · View at Google Scholar · View at Scopus
  28. A. Falk and A. Ichino, “Clean evidence on peer effects,” Journal of Labor Economics, vol. 24, no. 1, pp. 39–57, 2006. View at Publisher · View at Google Scholar · View at Scopus
  29. B. Bartling and F. A. Von Siemens, “Inequity aversion and moral hazard with multiple agents,” Working Paper, Mimeo, University of Munich, Munich, Germany, 2004. View at Google Scholar
  30. G. X. Wei and Y. J. Pu, “Fairness preference and tournament incentives,” Management Science, vol. 19, no. 2, pp. 47–54, 2006. View at Google Scholar
  31. Y. J. Pu, “A model incorporating fairness into principal-agent: a contribution from behavior economics,” Contemporary Finance and Economics, vol. 268, no. 3, pp. 5–11, 2007. View at Google Scholar
  32. Y. J. Pu, “A principal-agent model with fairness,” China Economic Quarterly, vol. 7, no. 1, pp. 298–318, 2007. View at Google Scholar
  33. M. Dufwenberg and G. Kirchsteiger, “A theory of sequential reciprocity,” Games and Economic Behavior, vol. 47, no. 2, pp. 268–298, 2004. View at Publisher · View at Google Scholar · View at MathSciNet · View at Scopus
  34. D. F. Wan, J. H. Luo, and J. F. Zhao, “The managerial trustworthy behavior and employee's effort level—based on a two stages sequential reciprocity game model,” Systems Engineering, vol. 7, no. 1, pp. 101–106, 2009. View at Google Scholar
  35. W. Shi and Y. J. Pu, “Dynamic reciprocity effect based on different information conditions,” Journal of System Engineering, vol. 28, no. 1, pp. 167–179, 2013. View at Google Scholar
  36. Y. J. Pu and W. Shi, “Reciprocity incentive effects based on the perspective of conict of interest,” Journal of Systems Engineering, vol. 28, no. 1, pp. 28–37, 2013. View at Google Scholar
  37. R. Fairchild, “An entrepreneur's choice of venture capitalist or angel-financing: a behavioral game-theoretic approach,” Journal of Business Venturing, vol. 26, no. 3, pp. 359–374, 2011. View at Publisher · View at Google Scholar · View at Scopus
  38. J. Yang, “An entrepreneur's choice of venture capitalist or angel-financing: a behavioral game-theoretic approach,” Management Sciences, vol. 56, no. 9, pp. 1568–1583, 2010. View at Google Scholar
  39. M. Wu and S. Y. Lai, “The study of effect on venture entrepreneur's persistent efforts to venture investment decision-making,” Journal of Industrial Engineering and Engineering Management, vol. 27, no. 4, pp. 22–32, 2013. View at Google Scholar
  40. R. Fairchild, “Financial contracting between managers and venture capitalists: the role of value-added services, reputation seeking, and bargaining power,” Journal of Financial Research, vol. 27, no. 4, pp. 481–495, 2004. View at Publisher · View at Google Scholar · View at Scopus