We study a model of managerial incentive problems where a manager chooses the first two moments of his firm's profit … distribution - mean and volatility - along an efficient frontier. Assuming that managers differ with respect to their marginal cost … of effort and their risk aversion we explore our model's comparative statics predictions in full detail. If managers …

We provide empirical evidence that managers smooth earnings using discretionary R&D spending (i.e., real smoothing …

conservatism to be a desirable feature that helps to alleviate agency conflicts between shareholders and managers, others suggest …

earnings. When stock-based compensation motivates managers to share their private information with shareholders, it will … expedite the pricing of future earnings in current stock prices. In contrast, when equity-compensated managers attempt to …