We analyze optimal correlation levels in information technologies when multiple signals are available as contracting mechanisms within the principal-agent paradigm. We identify sufficient conditions ensuring that uniformly lower-correlation functions (in action levels) are preferred, as well as...

It is common practice for firms in a variety of industries to specify bonus pools that are available for distribution among a group of managers. While the actual size of the bonus pool may vary with the realization of certain financial metrics, for example, earnings growth or...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>The reported cost of a product frequently contains historical cost components that reflect past investments in productive capacity. We examine a setting wherein a firm makes a sequence of overlapping capacity investments. Earlier research has identified particular accrual accounting...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>There is growing interest in the use of markets within firms. Proponents have noted that markets are a simple and efficient mechanism for allocating resources in economies in which information is dispersed. In contrast to the use of markets in the broader economy, the efficiency of an...

The corporate governance literature generally assumes that shareholders incentives to monitor management depend on how much of the firm the shareholders own. This dissertation proposes that another determinant of monitoring incentive is how long large shareholders intend to hold their shares,...