Multistage Effort and the Equity Structure of Venture Investment Based on Reciprocity Motivation
For venture capitals, it is a long process from an entry to its exit. In this paper, the activity of venture investment will be divided into multistages. And, according to the effort level entrepreneurs will choose, the venture capitalists will provide an equity structure at the very beginning. As a...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Wiley
2015-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2015/689362 |
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| author | Chuan Ding Jiacheng Chen Xin Liu Junjun Zheng |
| author_facet | Chuan Ding Jiacheng Chen Xin Liu Junjun Zheng |
| author_sort | Chuan Ding |
| collection | DOAJ |
| description | For venture capitals, it is a long process from an entry to its exit. In this paper, the activity of venture investment will be divided into multistages. And, according to the effort level entrepreneurs will choose, the venture capitalists will provide an equity structure at the very beginning. As a benchmark for comparison, we will establish two game models on multistage investment under perfect rationality: a cooperative game model and a noncooperative one. Further, as a cause of pervasive psychological preference behavior, reciprocity motivation will influence the behavior of the decision-makers. Given this situation, Rabin’s reciprocity motivation theory will be applied to the multistage game model of the venture investment, and multistage behavior game model will be established as well, based on the reciprocity motivation. By looking into the theoretical derivations and simulation studies, we find that if venture capitalists and entrepreneurs both have reciprocity preferences, their utility would have been Pareto improvement compared with those under perfect rationality. |
| format | Article |
| id | doaj-art-198aa1b77a6e49ccb0dd8ebde5cb4099 |
| institution | OA Journals |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2015-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-198aa1b77a6e49ccb0dd8ebde5cb40992025-08-20T02:02:05ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2015-01-01201510.1155/2015/689362689362Multistage Effort and the Equity Structure of Venture Investment Based on Reciprocity MotivationChuan Ding0Jiacheng Chen1Xin Liu2Junjun Zheng3Institute of Financial Mathematics, Southwestern University of Finance and Economics, Chengdu 610074, ChinaSchool of Finance, Southwestern University of Finance and Economics, Chengdu 610074, ChinaDepartment of Accounting, Tianfu College of Southwest University of Finance and Economics, Mianyang 621000, ChinaSchool of Economics and Management, Wuhan University, Wuhan 430072, ChinaFor venture capitals, it is a long process from an entry to its exit. In this paper, the activity of venture investment will be divided into multistages. And, according to the effort level entrepreneurs will choose, the venture capitalists will provide an equity structure at the very beginning. As a benchmark for comparison, we will establish two game models on multistage investment under perfect rationality: a cooperative game model and a noncooperative one. Further, as a cause of pervasive psychological preference behavior, reciprocity motivation will influence the behavior of the decision-makers. Given this situation, Rabin’s reciprocity motivation theory will be applied to the multistage game model of the venture investment, and multistage behavior game model will be established as well, based on the reciprocity motivation. By looking into the theoretical derivations and simulation studies, we find that if venture capitalists and entrepreneurs both have reciprocity preferences, their utility would have been Pareto improvement compared with those under perfect rationality.http://dx.doi.org/10.1155/2015/689362 |
| spellingShingle | Chuan Ding Jiacheng Chen Xin Liu Junjun Zheng Multistage Effort and the Equity Structure of Venture Investment Based on Reciprocity Motivation Discrete Dynamics in Nature and Society |
| title | Multistage Effort and the Equity Structure of Venture Investment Based on Reciprocity Motivation |
| title_full | Multistage Effort and the Equity Structure of Venture Investment Based on Reciprocity Motivation |
| title_fullStr | Multistage Effort and the Equity Structure of Venture Investment Based on Reciprocity Motivation |
| title_full_unstemmed | Multistage Effort and the Equity Structure of Venture Investment Based on Reciprocity Motivation |
| title_short | Multistage Effort and the Equity Structure of Venture Investment Based on Reciprocity Motivation |
| title_sort | multistage effort and the equity structure of venture investment based on reciprocity motivation |
| url | http://dx.doi.org/10.1155/2015/689362 |
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