We study the optimal dynamic contract that provides incentives for an agent (e.g., SPAC sponsor, VC general partner, CTO) to exploit investment opportunities/targets that arrive randomly over time via a costly search process. The agent is privy to the arrival as well as to the quality of the target and can take advantage of this for rent extraction during the search process and the ensuing production. The optimal contract provides the agent with incentives for timely and truthful reporting via a time-varying threshold for investment and an internal charge for the time spent on search. In the equilibrium, as time elapses, the charge becomes progressively higher while the investment threshold is progressively lower, resulting in overinvestment at a time-varying degree. Our model generates empirically testable predictions regarding investments (such as M&As, hedge fund activism, VC investing, SPACs, and internal innovations), linking the degree of overinvestment to observable firm and industry characteristics.

中文翻译：

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寻找独角兽：具有内生投资机会的动态机构


我们研究最佳动态合同，该合同为代理人（例如，SPAC 发起人、VC 普通合伙人、CTO）提供激励，以通过昂贵的搜索过程利用随着时间的推移随机出现的投资机会/目标。代理商了解目标的到达情况和质量，并可以利用这一点在搜索过程和随后的生产过程中提取租金。最佳合同通过时变的投资阈值和对搜索时间的内部收费，为代理提供及时和真实的报告的激励。在均衡中，随着时间的推移，费用逐渐升高，而投资门槛逐渐降低，导致时变程度的过度投资。我们的模型对投资（如并购、对冲基金激进主义、风险投资、SPAC 和内部创新）生成了可实证检验的预测，将过度投资的程度与可观察的公司和行业特征联系起来。