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's core business and explorative inventions. It implies that managers diversify their innovation portfolios and decrease …
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This paper investigates whether observed executive compensation contracts are designed to provide risk-taking incentives in addition to effort incentives. We develop a stylized principal-agent model that captures the interdependence between firm risk and managerial incentives. We calibrate the...
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evaluates that literature, clarifies what tournament theory predicts about the relationship, identifies methodological pitfalls … relationship between pay disparity and firm performance. Tournament theory offers a unified framework that can explain an inverted …
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