Department of Applied Mathematics & Physics, Kyoto University
Technical Report 2007-001 (January 10, 2007)
The Effects of Auditing in a Real Options Model
by Michi Nishihara and Takashi Shibata
This paper investigates the owner's optimal contract with a bonus-incentive and
audit when the owner delegates the investment timing decision to a
manager with private information on an investment project.
The solution includes discussion of the findings obtained in previous
work in this area.