文章基本信息

标题：Impacts of Internal Financing on Investment Decisions by Managers with Cognition Biases
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作者：Zhigang Liu ; Congming Mu ; Chunhui Wen 等
期刊名称：Journal of Mathematical Finance
印刷版ISSN：2162-2434
电子版ISSN：2162-2442
出版年度：2016
卷号：06
期号：03
页码：431-442
DOI：10.4236/jmf.2016.63034
语种：English
出版社：Scientific Research Publishing
摘要：This paper extends the standard model of real option by allowing managerial biases originating from the cognition about the economic states in the future to examine the impacts of internal liquid funds on the firm’s investment decisions. The model indicates that the interactions between the cognition biases and firm’s volatility determine the extent to which the manager overestimates the growth rate, hence subjectively overvalues the firm’s value and distorts the investment decisions. The managerial cognition biases enhance the sensitivity of corporate investment to cash flow and increase the convexity of the investment decisions against the firm’s volatility. Relying on the amount of internal liquidity, the manager with cognition biases can both delay and expedite investing.
关键词：Cognition Biases;Internal Financing;Real Option;Investment;Behavioral Finance;Subjective Evaluation