Choe, Chongwoo; Lien, Donald; Yu, Chia-Feng - Department of Econometrics and Business Statistics, … - 2013
We study an optimal contracting problem when the manager has self-esteem concerns and access to a hedging market. We show that the manager's equilibrium hedging position increases when he is more risk-averse, more uncertain about his own ability, or has stronger self-esteem concerns. Each...