The classical approach to testing for structural change employs retrospective tests using a historical data set of a given length. Here we consider a wide array of fluctuation-type tests in a monitoring situation – given a history period for which a regression relationship is known to be...

We consider a model of polluting firms subject to tax on emissions, monitoring, and penalties in case of underreporting and which face a choice between a more expensive clean and a less expensive dirty technology. Moreover, emissions are subject to random events.We show that the optimal...

The paper shows that, as owners accumulate larger stakes and hence become less risk-tolerant, their incentives to monitor management are attenuated because monitoring shifts some of the firm's risk from management to owners. This counterbalances the positive effect which more concentrated...