Showing 1 - 10 of 667
Using a news-based index of aggregate policy uncertainty in the US economy, we document a strong negative relation between policy uncertainty and corporate risk-taking. We show that high levels of policy uncertainty are associated with significantly lower future stock return volatility at the...
Persistent link: https://www.econbiz.de/10012947474
Persistent link: https://www.econbiz.de/10001642006
We analyze the Moral Hazard problem, assuming that agents are inequity averse. Our results differ from conventional contract theory and are more in line with empirical findings than standard results. We find: First, inequity aversion alters the structure of optimal contracts. Second, there is a...
Persistent link: https://www.econbiz.de/10003011503
"This study uses panel data describing about 6,500 employees in a large international company to study the incentive effects of performance related pay. The company uses two performance related remuneration mechanisms. One is an individual "surprise" bonus payment. The other is a more structured...
Persistent link: https://www.econbiz.de/10002262317
We study effects of a firm’s attempt to optimize an existing incentive scheme to increase sales growth for direct store delivery workers. Before optimization workers reported Ratchet Effects that lowered productivity. The altered incentive plan offered higher compensation for increased sales...
Persistent link: https://www.econbiz.de/10014042647
This paper considers a two-stage game with two owners and two managers. On the first stage, the owners choose a linear combination of profits and sales as incentives for their managers. On the second stage, the two managers compete in a tournament against each other. In a symmetric equilibrium,...
Persistent link: https://www.econbiz.de/10014117143
Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to be dysfunctional (gaming). This paper applies the empirical test developed by Courty and Marschke (2008) to detect whether the widely used class of Residual Income based...
Persistent link: https://www.econbiz.de/10014140893
What is the optimal portfolio allocation when an agent is investing both for a firm and for himself? I address this question by solving a manager's decision problem under a specific executive compensation structure. Specifically, I study how flat wage and stock compensation affect the manager's...
Persistent link: https://www.econbiz.de/10012947744
Performance-based pay is a common tool to improve workers' motivation and performance outcomes. It is frequently used in dairy farms with hired labor. This study investigates the effects of performance-based pay and other incentives for dairy farm workers on milk performance characteristics. In...
Persistent link: https://www.econbiz.de/10012981399
Using a regulation that increased portfolio disclosure frequency of US mutual funds as an exogenous shock shortening funds’ investment horizon, we find that affected funds influence portfolio firms to reduce the pay duration of their executives to incentivize them to also have shorter...
Persistent link: https://www.econbiz.de/10013236397