À繫¿¬±¸ Á¦ ±Ç È£ (2018³â 11¿ù)
Asian Review of Financial Research, Vol., No..
pp.98~106
pp.98~106
Patent Signaling of Startups Can Be Less Effective under Coarse Information
Guangsug Hahn Division of Humanities and Social Sciences, POSTECH
Joon Yeop Kwon School of Business Administration, Kyungpook National University, Korea
We consider a patent signaling model for startup financing where an entrepreneur signals his type by acquiring patents and investors have coarse information about the entrepreneur¡¯s true success probability. By invoking an extension of Cho and Kreps¡¯ (1987) Intuitive Criterion adapted to our model, we obtain the least-cost perfect Bayesian equilibrium, in which a high-type entrepreneur may receive a lower equity share despite acquiring a higher patent level than in the benchmark, where investors do not face coarse information. This implies that coarse information faced by investors may lead to less effective patent signaling than in the benchmark.
Guangsug Hahn
Joon Yeop Kwon
We consider a patent signaling model for startup financing where an entrepreneur signals his type by acquiring patents and investors have coarse information about the entrepreneur¡¯s true success probability. By invoking an extension of Cho and Kreps¡¯ (1987) Intuitive Criterion adapted to our model, we obtain the least-cost perfect Bayesian equilibrium, in which a high-type entrepreneur may receive a lower equity share despite acquiring a higher patent level than in the benchmark, where investors do not face coarse information. This implies that coarse information faced by investors may lead to less effective patent signaling than in the benchmark.
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