Endowment Effects Within Corporate Agency Relationships

Corporate Diversification and Agency

Firms undertake a variety of actions to reduce risk through diversification, including entering diverse lines of business, taking on project partners, and maintaining portfolios of risky projects such as R&D or natural resource exploration. By a well-known argument, securities holders do not directly benefit from risk-reducing corporate diversification when they can replicate this diversificati...

Agency, Information and Corporate Investment

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Endowment Effects in Chimpanzees

Human behavior is not always consistent with standard rational choice predictions. Apparent deviations from rational choice predictions provide a promising arena for the merger of economics and biology [1-6]. Although little is known about the extent to which other species exhibit these seemingly irrational patterns [7-9], similarities across species would suggest a common evolutionary root to ...

Corporate Tax Evasion with Agency Costs

1 Agency and Corporate Purchase of Insurance

Consistent with the agency cost rational, this paper documents that managers having larger private benefits of control purchase more insurance to reduce their own exposure to the probability of left-tail outcomes and hence the volatility of the firm's cash flows. Private benefits of control are estimated by the market value of the right to vote (measured as the difference between the price of t...