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Article: Risk Avoidance under Limited Liability

TitleRisk Avoidance under Limited Liability
Authors
Suen, W
KeywordsBusiness and economics
Economic systems and theories
Economic history
Issue Date1995
PublisherAcademic Press. The Journal's web site is located at http://www.elsevier.com/locate/jet
Citation
Journal Of Economic Theory, 1995, v. 65 n. 2, p. 627-634 How to Cite?
DOI: http://dx.doi.org/10.1006/jeth.1995.1026
AbstractWhen the expected flow returns from an investment is positive, bankruptcy carries a cost in terms of the future profit opportunities forgone. This paper demonstrates that, under limited liability, the one-shot gain from taking risky projects is offset by the long-term loss resulting from a higher probability of bankruptcy. In a multi-period model, the incentive problems associated with limited liability is less severe than what static models would suggest. Journal of Economic Literature Classification Numbers: D81, G33. © 1995 Academic Press. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/48712
ISSN
0022-0531
2023 Impact Factor: 1.4
2023 SCImago Journal Rankings: 3.218
ISI Accession Number ID
WOS:A1995QW42300016

 

DC FieldValueLanguage
dc.contributor.authorSuen, Wen_HK
dc.date.accessioned2008-05-22T04:22:08Z-
dc.date.available2008-05-22T04:22:08Z-
dc.date.issued1995en_HK
dc.identifier.citationJournal Of Economic Theory, 1995, v. 65 n. 2, p. 627-634en_HK
dc.identifier.issn0022-0531en_HK
dc.identifier.urihttp://hdl.handle.net/10722/48712-
dc.description.abstractWhen the expected flow returns from an investment is positive, bankruptcy carries a cost in terms of the future profit opportunities forgone. This paper demonstrates that, under limited liability, the one-shot gain from taking risky projects is offset by the long-term loss resulting from a higher probability of bankruptcy. In a multi-period model, the incentive problems associated with limited liability is less severe than what static models would suggest. Journal of Economic Literature Classification Numbers: D81, G33. © 1995 Academic Press. All rights reserved.en_HK
dc.format.extent132796 bytes-
dc.format.extent242007 bytes-
dc.format.mimetypeapplication/pdf-
dc.format.mimetypeapplication/pdf-
dc.languageengen_HK
dc.publisherAcademic Press. The Journal's web site is located at http://www.elsevier.com/locate/jeten_HK
dc.relation.ispartofJournal of Economic Theoryen_HK
dc.rightsThis work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.-
dc.subjectBusiness and economicsen_HK
dc.subjectEconomic systems and theoriesen_HK
dc.subjectEconomic historyen_HK
dc.titleRisk Avoidance under Limited Liabilityen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0022-0531&volume=65&issue=2&spage=627&epage=634&date=1995&atitle=Risk+Avoidance+under+Limited+Liabilityen_HK
dc.identifier.emailSuen, W: hrneswc@hkucc.hku.hken_HK
dc.identifier.authoritySuen, W=rp00066en_HK
dc.description.naturepostprinten_HK
dc.identifier.doi10.1006/jeth.1995.1026en_HK
dc.identifier.scopuseid_2-s2.0-58149363405en_HK
dc.identifier.hkuros7058-
dc.identifier.volume65en_HK
dc.identifier.issue2en_HK
dc.identifier.spage627en_HK
dc.identifier.epage634en_HK
dc.identifier.isiWOS:A1995QW42300016-
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridSuen, W=7006977946en_HK
dc.identifier.issnl0022-0531-

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