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By extracting detailed birth information for managers of Chinese listed firms from 2011 to 2021, we developed a novel … managers were more inclined to adopt a positive disclosure tone and tend to underestimate future risks in forward …
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I consider the optimal contract for an overconfident manager in a principal-agent model with moral hazard where the contract is written on the earnings of the firm. Overconfidence causes the manager to overestimate his ability to affect the outcome of the firm. Overconfidence first reduces cost...
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