In this paper, a promotion tournament is considered, where, at the beginning of the tournament, it is unknown how long the tournament lasts. Further, the promotion decision is based on the assessments of a supervisor with imperfect recall. In line with psychological research, the supervisor is...

"Substantial evidence shows that North Americans are generally more accepting of the market than Europeans and attribute market outcomes to a larger degree to effort or skill. This article discusses the perceived fairness of layoffs and pay cuts in North America and Germany. We expect North...

A question of increasing interest to researchers in a variety of fields is whether the biases found in judgment and decision making research remain present in contexts in which experienced participants face strong economic incentives. To investigate this question, we analyze the decision making...

Part 2D.2 of the Corporations Act 2001 (Cth) regulates the making of termination payments to company directors, with the aim of limiting or preventing companies from giving golden parachutes. Termination payments are prohibited unless they have shareholder approval, or they fall within...

This doctoral thesis examines the influence of relative performance and managerial incentives on corporate financial misrepresentation, and then tests the relationship between misrepresentation and subsequent operating performance, including the moderating effects of change in board composition...

We develop an optimal dynamic contracting theory of overpay for jobs in which moral hazard is a key concern, such as investment banking. Overpaying jobs feature up-or-out contracts and long work hours, yet give more utility to workers than their outside option dictates. Labor markets feature...

On theoretical grounds, internal monitoring of top executives by the supervisory board is expected to result in positive abnormal returns subsequent to the announcement of their unanticipated forced departures. The empirical evidence is ambiguous and we analyze three non-competing explanations...

Multiple-performance-measure agency models predict that optimal contracts should place greater reliance on performance measures that are more precise and more sensitive to the agent's effort. We apply these predictions to CEO retention decisions. First, we develop an agency model to motivate...

We study a rank-order tournament in which employees acquire and use private information for an investment decision. In this environment, competition can turn employees into yes men who make investment decisions that excessively agree with preconceived notions. The specter of yes-man behavior may...