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Tractability in Incentive Contracting
Edmans, Alex - 2009
This paper identifies a class of multiperiod agency problems in which the optimal contract is tractable (attainable in closed form). By modeling the noise before the action in each period, we force the contract to provide sufficient incentives state-by-state, rather than merely on average. This...
Persistent link: https://www.econbiz.de/10012463104
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Incentive Contracts
Lazear, Edward P. - 1986
Persistent link: https://www.econbiz.de/10012477157
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A Comparison of Tournaments and Contracts
Green, Jerry R. - 1982
Tournaments, reward structures based on rank order, are compared with individual contracts in a model with one risk-neutral principal and many risk-averse agents. Each agents' output is a stochastic function of his effort level plus an additive shock term that is common to all the agents. The...
Persistent link: https://www.econbiz.de/10012478271
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A Continuous-Time Agency Model of Optimal Contracting and Capital Structure
DeMarzo, Peter M. - 2004
We consider a principal-agent model in which the agent needs to raise capital from the principal to finance a project. Our model is based on DeMarzo and Fishman (2003), except that the agent's cash flows are given by a Brownian motion with drift in continuous time. The difficulty in writing an...
Persistent link: https://www.econbiz.de/10012468076
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The Value of Informativeness for Contracting
Chaigneau, Pierre - 2014
The informativeness principle demonstrates qualitative benefits to increasing signal precision. However, it is difficult to quantify these benefits -- and compare them against the costs of precision -- since we typically cannot solve for the optimal contract and analyze how it changes with...
Persistent link: https://www.econbiz.de/10012458123
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Managerial Value Diversion and Shareholder Wealth
Bebchuk, Lucian Arye - 2000
managers. We question this view within its own analytical framework by studying, in a principal-agent model, the effects of … diversion overlooks a significant cost of such behavior. Many common modes of compensation can provide managers with incentives …
Persistent link: https://www.econbiz.de/10012471137
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Performance Incentives Within Firms : The Effect of Managerial Responsibility
Aggarwal, Rajesh K. - 1999
executive officers. However, firms are run by teams of managers, and a theory of the firm should also explain the distribution …
Persistent link: https://www.econbiz.de/10012471450
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Who’s Paying Attention? Measuring Common Ownership and Its Impact on Managerial Incentives
Gilje, Erik P. - 2019
We derive a measure that captures the extent to which overlapping ownership structures shift managers' incentives to …
Persistent link: https://www.econbiz.de/10012479596
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Stock-Based Compensation and CEO (Dis)Incentives
Benmelech, Efraim - 2008
Stock-based compensation is the standard solution to agency problems between shareholders and managers. In a dynamic … managers to work harder, it also induces them to hide any worsening of the firm's investment opportunities by following largely …-valued while managers hide the bad news to shareholders. We find that a firm-specific compensation package based on both stock and …
Persistent link: https://www.econbiz.de/10012464915
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Bureaucracy as a Mechanism to Generate Information
Novaes, Walter - 2003
Firms that maintain no formal record of actions and events would hardly be considered well managed. Yet, organizations that require the recording of actions and the filing of reports are often labeled bureaucratic' and inefficient. This paper argues that the thin line between efficient...
Persistent link: https://www.econbiz.de/10012468935