Acquisition d’information dans un modèle intertemporel en temps continu

Cet article examine la demande d’information et la valeur de l’information dans un modèle intertemporel en temps continu. Le modèle étudié est un modèle à information incomplète où la technologie d’information est contrôlée par l’investisseur moyennant un coût. Le mécanisme bayésien continu de révision des croyances produit, pour cette structure, une distribution postérieure gaussienne à tout point du temps. Le contrôle de la technologie d’information est équivalent au contrôle de l’estimateur de la position de la variable d’état (espérance conditionnelle) ainsi que de la précision de cet estimateur (variance conditionnelle). La demande d’information, dans notre modèle, se compose de deux termes, qui résultent du conflit entre deux objets d’apprentissage. Sous l’hypothèse d’une offre de précision stochastique et inélastique, le prix d’équilibre de l’information est dérivé et sa structure analysée.In this paper we examine the demand for information and the value of information in an intertemporal continuous time model. The model analyzed is a model with incomplete information where the information technology is controlled by the investor at a cost. The continuous bayesian updating of beliefs yields, for the information structure postulated, a posterior conditional distribution that is Gaussian at any point in time. The control of the information technology is equivalent to the control of the estimator of the state variable (conditional mean) and of the precision of this estimator (conditional variance). The demand for information is composed of two terms which result from the conflict between two subjects of learning. Under an assumption on the supply of precision, we derive and analyze the equilibrium price of information

Corporate Policy and the Coherence of Delaware Takeover Law

This Article presents a model that can be used to explain key elements of Delaware takeover law. By incorporating corporate policy as a key variable in the model, Delaware law’s management discretion rule can be shown to be best suited for maximizing the value of the corporation and the shareholders’ interest under a set of reasonable assumptions. By allowing for occasional market mispricing and the agency costs associated with managing to the market, we demonstrate that a shareholder choice regime would likely lead to suboptimal investment decisions. In our model, managers are assumed to have better information regarding alternative corporate policies than shareholders but may, in certain circumstances, act to maximize share price in order to insulate themselves from hostile tender offers, even at the expense of maximizing firm value. This theory explains the result in Paramount v. Time, and also why shareholder choice is allowed in limited instances that implicate Revlon duties such as Interco and Paramount v. QVC

Corporate Policy and the Coherence of Delaware Takeover Law

This Article presents a model that can be used to explain key elements of Delaware takeover law. By incorporating corporate policy as a key variable in the model, Delaware law’s management discretion rule can be shown to be best suited for maximizing the value of the corporation and the shareholders’ interest under a set of reasonable assumptions. By allowing for occasional market mispricing and the agency costs associated with managing to the market, we demonstrate that a shareholder choice regime would likely lead to suboptimal investment decisions. In our model, managers are assumed to have better information regarding alternative corporate policies than shareholders but may, in certain circumstances, act to maximize share price in order to insulate themselves from hostile tender offers, even at the expense of maximizing firm value. This theory explains the result in Paramount v. Time, and also why shareholder choice is allowed in limited instances that implicate Revlon duties such as Interco and Paramount v. QVC

Why Defer to Managers? A Strong-Form Efficiency Model

We compare the efficiency with which management discretion and shareholder choice regulate hostile tender offers. This is the first paper in a long running debate that rigorously compares these legal rules to analyze both the critical informational assumptions and the interplay of those assumptions with principles of financial market efficiency. A critical innovation of our model is its focus on an informed management’s choice among alternative corporate policies under the protection of the business judgment rule, but where agency costs exist. We assume that corporate assets and reinvestment opportunities are efficiently priced by financial markets, but that markets never learn the value of foregone investments. In this case, shareholder choice may create an agency problem whereby managers forego positive net present value investments that increase the risk of a hostile bid. We are able to determine analytic conditions under which the expected cost of this agency problem exceeds that of the standard agency problem usually identified with management discretion

Why Defer to Managers? A Strong-Form Efficiency Model

We compare the efficiency with which management discretion and shareholder choice regulate hostile tender offers. This is the first paper in a long running debate that rigorously compares these legal rules to analyze both the critical informational assumptions and the interplay of those assumptions with principles of financial market efficiency. A critical innovation of our model is its focus on an informed management’s choice among alternative corporate policies under the protection of the business judgment rule, but where agency costs exist. We assume that corporate assets and reinvestment opportunities are efficiently priced by financial markets, but that markets never learn the value of foregone investments. In this case, shareholder choice may create an agency problem whereby managers forego positive net present value investments that increase the risk of a hostile bid. We are able to determine analytic conditions under which the expected cost of this agency problem exceeds that of the standard agency problem usually identified with management discretion