Autor: Fioriti Andrés*, Hernández Chanto Allan**, Ordóñez Calafi Guillem***
Institución: (*)UNS-CONICET, (**)University of Queensland, (***)University of Bristol
Año: 2025
JEL: G3, D8
Resumen:
Firms' issuance of non-linear securities, such as debt or options, creates risk-shifting incentives that may lead to inefficient outcomes. This widely accepted result relies on the assumption that firm decision rights (typically held by residual claimants) are unaffected by the issuance of such securities. In this paper, we relax this assumption and analyze a setting where cash flow rights and decision rights are allocated independently. Although payoffs are determined solely by rights over realized cash flows, decision rights hold value because they influence the probability distribution of those cash flows. This interdependence makes cash flow and decision rights substitutes. We demonstrate that their independent allocation leads to Pareto-superior outcomes and can restore efficiency.