Essays in Principal-agent Theory PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Essays in Principal-agent Theory PDF full book. Access full book title Essays in Principal-agent Theory by Liang Zou. Download full books in PDF and EPUB format.
Author: Liang Zou
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 186
Get Book Here
Book Description
Author: Liang Zou
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 186
Get Book Here
Book Description
Author: Anil Arya
Publisher:
ISBN:
Category : Agency (Law)
Languages : en
Pages : 228
Get Book Here
Book Description
Author: Nadide Banu Olcay
Publisher:
ISBN:
Category : Agency costs
Languages : en
Pages : 173
Get Book Here
Book Description
This dissertation consists of three chapters on principal-agent models. Chapter 2 studies an optimal contract design problem in a principal-framework whereas chapter 3 is an empirical investigation of the incentive contracts in the market of top executives. Chapter 4 is a theoretical chapter exploring welfare impacts of the structure in a top-level bureaucracy. In the first chapter, I consider a dynamic moral hazard model where the principal offers a series of short-run contracts. I study the optimal mix of two alternative instruments for incentive provision: a performance based wage (a "carrot") and a termination threat (a "stick"). At a given point in time, these instruments are substitutes in the provision of incentives. I am particularly interested in the dynamic interaction of these two instruments. Both carrot and stick are used more intensively as the agent approaches the end of her finite life. The sharing of the surplus of the relationship plays a key role: a termination threat is included in the optimal contract if and only if the agent's expected future gain from the relationship is sufficiently high, compared to the principal's expected future gain. Also, a termination threat is more likely to be optimal if output depends more on "luck" than on effort, if the discount factor is high, or if the agent's productivity is low. Having inspired from chapter 2, chapter 3 of the dissertation is an empirical study of the contracts of Chief Executive Officers (CEO). Direct pay for performance and a threat of termination when performance is low are two important instruments to incentivize CEOs. This chapter is an empirical analysis of the use of these two incentive devices and how they depend on tenure and managerial ability. For managers promoted from within a firm, ability is proxied by their age at the time of promotion. For managers hired from outside, I instead rely on constructed measures of "reputation", based on media citations over time windows of different length. Using a sample of firms, listed in S & P 1500 over the period 1998-2008, I find that CEO compensation and the threat of forced turnover are used as incentive devices throughout tenure. Even though the results indicate that pay increases as the CEO is more senior in her tenure, there is no strong evidence that termination threat follows a particular time pattern. For outsider CEOs, a better reputation increases pay and decreases the likelihood of forced turnover, with stronger effects for more current reputational measures. Regarding the impacts of reputation on the tenure-pay relationship, only more current measures have a significant and negative effect. Managerial ability, as proxied by age-at-promotion for insiders and as proxied by reputation for outsiders, decreases the likelihood of forced turnover. More current reputation measures, as in the case of total pay, have a larger impact of likelihood of turnover. Chapter 4 investigates the welfare implications of multiple principals in the highest level of bureaucracy. An agent has to carry out two separate tasks, which can either be organized by two separate principals, or combined under one principal. The relationship between the top level (the principals) and the lower level (agent) of the bureaucracy is a "principal-agent problem". The existence of multiple principals generates a "common agency". The analysis reveals that the optimal hierarchy depends on the existence of "rents" from office that the principals enjoy. If there are no rents, the two systems are equally welfare-efficient. A single-principal model dominates common agency otherwise.
Author: John R. Minahan
Publisher:
ISBN:
Category :
Languages : en
Pages : 186
Get Book Here
Book Description
Author: Thabani Nyoni
Publisher: GRIN Verlag
ISBN: 3668007357
Category : Business & Economics
Languages : en
Pages : 11
Get Book Here
Book Description
Essay from the year 2015 in the subject Business economics - Business Management, Corporate Governance, , language: English, abstract: While it is important to understand the various objectives of firms, it is equally important also to note that some of these objectives may be inconsistent or incompatible with each other due to the principal-agent problem that normally exists between shareholders (owners of the firm) and managers (those who control the firm). This essay serves to analyse some managerial theories in light of the principal-agent problem and the conflict of interest between the shareholders and managers.
Author: Changyong Ham
Publisher:
ISBN:
Category : Commercial agents
Languages : en
Pages : 202
Get Book Here
Book Description
Author: Rick Antle
Publisher: Springer Science & Business Media
ISBN: 0387303995
Category : Business & Economics
Languages : en
Pages : 334
Get Book Here
Book Description
The integration of accounting and the economics of information developed by Joel S. Demski and those he inspired has revolutionized accounting thought. This volume collects papers on accounting theory in honor of Professor Demski. The book also contains an extensive review of Professor Demski’s own contributions to the theory of accounting over the past four decades.
Author: Randolph Garth Silvers
Publisher:
ISBN:
Category : Agency (Law)
Languages : en
Pages : 340
Get Book Here
Book Description
Author: Bernard Salanié
Publisher: MIT Press
ISBN: 0262195259
Category : Business & Economics
Languages : en
Pages : 257
Get Book Here
Book Description
A concise introduction to the theory of contracts, emphasizing basic tools that allow the reader to understand the main theoretical models; revised and updated throughout for this edition.
Author: Anton Suvorov
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
The first chapter explores the "hidden costs of rewards" in a dynamic informed-principal framework. It shows that rewards are "addictive" : once offered, a contingent reward makes the agent expect it in the future. In a long-term relationship there is a two-sided ratchet effect : the principal is concerned about creating addiction for the agent, whereas the agent does not want to appear too enthusiastic. The second chapter suggests a rationale for paying discretionary bonuses in finitely repeated principal-agent interactions. If the principal cannot commit to contingent rewards, he may still pay discretionary bonuses to give the agent credible feedback about his performance. The third chapter investigates the credibility of advice of a broker, who mediates trade between a seller and a buyer and is partially informed about the buyer's valuation. We derive the optimal direct mechanism maximizing the broker's profit, and investigate information transmission in a decentralized mode.
