Shut Down Option and Profit Sharing

Moretto, Michele ; Rossini, Gianpaolo (1994) Shut Down Option and Profit Sharing. Bologna: Dipartimento di Scienze economiche DSE, p. 41. DOI 10.6092/unibo/amsacta/5136. In: Quaderni - Working Paper DSE (190). ISSN 2282-6483.
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Abstract

Aoki's profit sharing firm organization is associated with the option evaluation model of investment. The firm is endowed with a shut down option it can exercise when the market price, assumed uncertain, falls below a certain trigger level. The distributive parameter is the result of a bargaining process and it is influenced by the shut down option. Workers can delay the firm's shut down by sharing not only profits but also losses. In that case the workers' policy changes both the optimal distributive parameter and the trigger price in a non trivial way. The overall result implies an increase of the profit share going to shareholders as compared to the original Aoki's finding.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Moretto, Michele
Rossini, Gianpaolo0000-0001-9897-6682
Subjects
ISSN
2282-6483
DOI
Deposit date
10 May 2016 08:18
Last modified
11 May 2016 07:52
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