Executive Stock Option Programs (SOPs) have become the dominant compensation instrument for top-management in recent years. The incentive effects of an SOP both with respect to corporate investment and financing decisions critically depend on the design of the SOP. A specific problem in...

Participative budgeting processes are an important element of management control systems in many firms. The literature on participative budgeting has studied the role of information asymmetry. However, prior contributions do not differentiate between superior uncertainty about future...

This study investigates whether task interdependence in teams alters the effectiveness of managerial discretion in motivating team performance. Teams are particularly useful when employees' tasks are interdependent, i.e., when the degree to which the increase in team performance resulting from a...

This study investigates whether the effect of managerial discretion over team members' compensation on team performance depends on task interdependence. Task interdependence reflects the degree to which the increase in team performance resulting from a team member's effort depends on the efforts...

Using an experiment, we investigate whether job candidates’ noncontractible effort promises increase their actual effort in the work relationship when the labor market is competitive. Due to promise-keeping preferences, individuals tend to keep promises even if doing so is costly. However,...