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Toward a Theory of Asset Subscription

Author

Listed:
  • Danyang Xie

    (International Monetary Fund)

Abstract

This paper develops an understanding toward a theory of asset subscription. When a firm needs to raise cash from an asset that is too large or too risky for a single individual or financial institution so that an auction method is not applicable, the firm may use a subscription scheme. In this paper, we discuss a Nash subscription (NS) scheme and a sequential subscription (SS) scheme. We characterize the optimal strategy when the value of the asset is known. The comparison between a NS and a SS is provided. The difference between an auction scheme and a subscription scheme is discussed.

Suggested Citation

  • Danyang Xie, 2003. "Toward a Theory of Asset Subscription," Finance 0303001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpfi:0303001
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/fin/papers/0303/0303001.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Nash subscription; sequential subscription; auction;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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