capital;l budgeting
The Society for Financial Studies
Decision Processes, Agency Problems, and Information: An Economic Analysis of Capital
Budgeting Procedures
Author(s): Anthony M. Marino and John G. Matsusaka
Source: The Review of Financial Studies, Vol. 18, No. 1 (Spring, 2005), pp. 301-325
Published by: Oxford University Press. Sponsor: The Society for Financial Studies.
Stable URL: http://www.jstor.org/stable/3598074 .
Accessed: 15/11/2013 17:17
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DecisionProcesses,AgencyProblems,and
An
Information: EconomicAnalysisof Capital
BudgetingProcedures
Anthony M. Marino
John G. Matsusaka
University of Southern California use Corporations a varietyof processesto allocatecapital.This articlestudiesthe from the perspective a of benefitsand costs of severalcommonbudgetprocedures that delegateaspectsof the
Processes
modelwith agencyand information problems. in whileprocesses decisionto the agentresultin too manyprojects beingapproved, causethe agentto strategically retainsthe rightto rejectprojects whichthe principal aboutprojectquality.We show how the choiceof a decision distorthis information process depends on these two costs, and
Decision Processes, Agency Problems, and Information: An Economic Analysis of Capital
Budgeting Procedures
Author(s): Anthony M. Marino and John G. Matsusaka
Source: The Review of Financial Studies, Vol. 18, No. 1 (Spring, 2005), pp. 301-325
Published by: Oxford University Press. Sponsor: The Society for Financial Studies.
Stable URL: http://www.jstor.org/stable/3598074 .
Accessed: 15/11/2013 17:17
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp .
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.
.
Oxford University Press and The Society for Financial Studies are collaborating with JSTOR to digitize, preserve and extend access to The Review of Financial Studies.
http://www.jstor.org
This content downloaded from 147.197.213.176 on Fri, 15 Nov 2013 17:17:22 PM
All use subject to JSTOR Terms and Conditions
DecisionProcesses,AgencyProblems,and
An
Information: EconomicAnalysisof Capital
BudgetingProcedures
Anthony M. Marino
John G. Matsusaka
University of Southern California use Corporations a varietyof processesto allocatecapital.This articlestudiesthe from the perspective a of benefitsand costs of severalcommonbudgetprocedures that delegateaspectsof the
Processes
modelwith agencyand information problems. in whileprocesses decisionto the agentresultin too manyprojects beingapproved, causethe agentto strategically retainsthe rightto rejectprojects whichthe principal aboutprojectquality.We show how the choiceof a decision distorthis information process depends on these two costs, and