Donaldson, John B.; Gershun, Natalia; Giannoni, Marc P. - In: Journal of Economic Theory 148 (2013) 1, pp. 31-63
We consider a simple real business cycle model in which shareholders hire self-interested executives to manage their firm. A generic family of compensation contracts similar to those employed in practice is studied. When compensation is convex in the firmʼs dividend, an increase in the firmʼs...
