Agency in Intangibles

71 Pages Posted: 16 Sep 2018 Last revised: 9 May 2022

See all articles by Colin Ward

Colin Ward

University of Minnesota - Carlson School of Management

Date Written: May 6, 2022


I argue that intangible assets promote agency conflicts between outside investors and inside specialists. Their opacity and specialized nature provide a microfoundation for why highly intangible firms underinvest despite great valuations and profitability---a challenge for first-best theories---by connecting their dynamics to the growth and dispersion of specialists' compensation. The model produces a unified treatment of the economic forces surrounding intangible capital and its predictions are strongly supported in the data.

Keywords: intangible capital, dynamic contracting, investment, compensation

JEL Classification: D21, E22, G31, G32, L22

Suggested Citation

Ward, Colin, Agency in Intangibles (May 6, 2022). Available at SSRN: or

Colin Ward (Contact Author)

University of Minnesota - Carlson School of Management ( email )

Carlson School of Management
321 19th Avenue South
Minneapolis, MN 55455
United States

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