COURSES 2016-17 • Carrots, Sticks, Norms, and Nudges: Changing Minds and Behaviors: LAW 7501 (Spr) • Policy Practicum: California Prop. 64 and Marijuana Policy: LAW 805T (Win) 2015-16 • Law and Psychology: LAW 534 (Win) • Research Design for Empirical Legal Studies: LAW 712 (Aut) 2014-15 • Law and Psychology: LAW 534 (Win) • Policy Practicum: Analyzing Alternative Laws and Policies for Psychoac...

We investigate the existence of and explicitly characterize compensation structures that eliminate agency conflicts between a leveraged firm (or its shareholders) and the manager due to managerial asset substitution within a continuous time framework. The manager may dynamically switch between two strategies with different risks and expected returns after debt is in place. We show that when the...