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Agency, firm growth, and managerial turnover
Anderson, Ronald W.; Bustamante, Maria Cecilia; … - London School of Economics (LSE) - 2012
We study the relation between firm growth and managerial incentive provision under moral hazard when a long-lived firm is operated by a sequence of managers. In our model, firms replace their managers not only upon poor performance to provide incentives, but also when outside managers are at a...
Persistent link: https://www.econbiz.de/10010745265
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Choice of corporate risk management tools under moral hazard
Bena, Jan - London School of Economics (LSE) - 2006
. Risk management is valuable as it reduces the costs of raising external financing, increases debt capacity, lessens … leads to inefficient excessive continuation if used without coverage limits. When insurance against an operational risk is …
Persistent link: https://www.econbiz.de/10010745872
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Read my lips : the political economy of information transmission
Besley, Timothy; Pande, Rohini - London School of Economics (LSE) - 1998
The paper studies credible information transmission by governments. A group of heterogenous individuals have to make private investment and labour supply decisions while relying on the government for information about investment returns. The government consists of an elected citizen who chooses...
Persistent link: https://www.econbiz.de/10010928656
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Land distribution, incentives and the choice of production techniques in Nicaragua
Bandiera, Oriana - London School of Economics (LSE) - 2002
Does the distribution of land rights affect the choice of contractible techniques? I present evidence suggesting that Nicaraguan farmers are more likely to grow effort-intensive crops on owned rather than on rented plots. I consider two theoretical arguments that illustrate why property rights...
Persistent link: https://www.econbiz.de/10010928686
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Anti-evasion auditing policy in the presence of common income shocks
Sanchez-Villalba, Miguel - London School of Economics (LSE) - 2006
When fairly homogeneous taxpayers are affected by common income shocks, a tax agency’s optimal auditing strategy consists of auditing a low-income declarer with a probability that (weakly) increases with the other taxpayers’ declarations. Such policy generates a coordination game among...
Persistent link: https://www.econbiz.de/10010928739
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A theory of supervision with endogenous transaction costs
Faure-Grimaud, Antoine; Laffont, Jean-Jacques; … - London School of Economics (LSE) - 1998
supervisor who can acquire soft information about an agent's productivity. If the supervisor were risk-neutral, the principal … would simply make the better informed supervisor residual claimant for the hierarchy's profit. Under risk-aversion, the … technology and the supervisor's degree of risk-aversion. We then discuss various implications of the model for the design and …
Persistent link: https://www.econbiz.de/10010928775
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Cooperatives vs. outside ownership
Hart, Oliver; Moore, John - London School of Economics (LSE) - 1998
We are concerned with the design of a constitution for a firm - an ex ante contract which assigns residual rights of control (and possibly residual income rights) without reference to the issue to be decided. We focus attention on two polar constitutions: non-profit cooperatives and outside...
Persistent link: https://www.econbiz.de/10010928786
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Anti-herding and strategic consultation
Levy, Gilat - London School of Economics (LSE) - 2004
In this paper I analyze how careerist decision makers aggregate and use information provided by others. I find that decision makers who are motivated by reputation concerns tend to ‘anti-herding’, i.e., they excessively contradict public information such as the prior or others’...
Persistent link: https://www.econbiz.de/10010928812
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Dynamic yardstick regulation
Faure-Grimaud, Antoine; Reiche, Sonje - London School of Economics (LSE) - 2003
This paper shows that the inability of regulators to commit to long-term contracts is irrelevant when there is some competition between regulated firms and when firms' private information is correlated. This sharply contrasts with the dynamic of regulation without such competition. The paper...
Persistent link: https://www.econbiz.de/10010744985
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Information costs, networks and intermediation in international trade
Petropoulou, Dimitra - London School of Economics (LSE) - 2008
This paper presents a pairwise matching model with two-sided information asymmetry to analyse the impact of information costs on endogenous network building and matching by information intermediaries. The framework innovates by examining the role of information costs on incentives for trade...
Persistent link: https://www.econbiz.de/10010745054