A Graphical Summary of Market Imperfections

1
A Graphical Summary of Market Imperfections
Asset Substitution Jensen and Meckling Gavish and
Kalay
Debt Overhang Myers (1977)
Costly State Verification Diamond, Gale and
Hellwig
Managerial Effort
Debt Investors
Outside Investors
Entrepreneur
Equity Investors
Information asymmetry about quality Leland and
Pyle, Narayanan, Myers and Majluf, Brennan and
Kraus
Information asymmetry about risk Stiglitz and
Weiss
Free cash flow problem Jensen (1986)
2
Summary of Moral Hazard Models
3
Summary of Information Asymmetry Models