Notice of RetractionAn analysis of double moral hazard in venture capital under equity contract

Notice of Retraction

After careful and considered review of the content of this paper by a duly constituted expert committee, this paper has been found to be in violation of IEEE´s Publication Principles.

We hereby retract the content of this paper. Reasonable effort should be made to remove all past references to this paper.

The presenting author of this paper has the option to appeal this decision by contacting TPII@ieee.org.

In the process of venture capital, due to the influence of incomplete and asymmetric information, neither of the two sides can grasp all information, but have their own information superiority. Therefore, both venture capitalists and entrepreneurs have motives to seek private benefits, and their rational choice is speculation, which leads to double moral hazard. In this situation, their speculation will deviate from the Pareto optimal. Traditional research focuses on moral hazard of entrepreneurs and the incentives on their sides, but we consider more about the question of how to avoid double moral hazard effectively, and put the private benefit of venture capitalists into the design of the contract, thus solving this problem efficiently.