When firms can protect their innovations by secrecy or lead-time, the additional effect of patent protection is not obvious. This paper shows that when firms compete for a single innovation, patent protection still increases R&D investment but decreases social welfare due to over-investment....

This paper provides a simple model of authority and leadership to discuss the issue of splitting the roles of CEO and Chairman. The board has the formal authority, but can delegate the leadership to the CEO by providing the title of chairman to the CEO. The paper shows that the optimal...

When an agent overstates his/her true performance, a rational market can simply discount the reported performance, and correctly guess the true performance. This paper shows, however, that such rational market discounting leads to less productive effort by the agent and less performance-pay by...

Using mergers and acquisitions as a natural experiment, this paper analyzes how changes in workers?status in the workplace affect their turnover decisions. The evidence suggests that workers have different preferences for status depending on reference group. When compared with co-workers in the...

Abstract: There are two views on board objectives: (i) boards act as monitors with the objective to maximize firms' long-term fundamental values; and (ii) boards act myopically with a focus on firms' short-term market values. We propose a principal-agent model linking CEO incentive pay to...

This paper studies the long-term effect of the business cycle at the time workers enter the labor market on workers?future promotions and wages. Using the Swedish employer-employee matched data, we find that a cohort of workers entering the labor market during a boom gets promoted faster and...