Bargaining power effects in financial contracting. A joint analysis of contract type and placement mode choices. (Q2496937)

This book consisting of a university doctoral thesis is divided into six chapters and three appendices and studies bargaining power effects that affect a firm's financial decision making. The author begins in chapter~1 with a brief introductory note and an outline of the motivation behind this work. In the second chapter, the book presents the literature review and all the background research that has been performed in the past in this area. This includes, among others, issues relation to financial contracting and decision making under asymmetric information, the notion of bargaining power and issues around corporate control and competition. In the third chapter, the author presents a novel model to analyze bargaining power effects. It is based on a principal-agent model where a lender and a firm (the principal and the agent) bargain on how to finance the firm's risky project. Several optimization models to obtain feasible contracts are presented. In the fourth chapter the author extends the model by incorporating an ex-ante informational asymmetry. As in the case of the base model, several scenarios are examined and solved under various assumptions. The scenarios and assumptions used are compared with each other and useful results are thus obtained. The last two chapters present a discussion of the proposed approach to bargaining power, and suggestions for possible extensions. This book concludes with three technical annexes and a detailed list of relevant references.