This study analyzes the effect of managerial style on firm value by partitioning general and administrative (G&A) expenses in the REIT industry into a nondiscretionary “structural” component associated with the costs of asset and liability management and a discretionary or “style” component. The discretionary component is significantly related to at least one measure of stylespecifically, the p...

Firms can increase profitability by appropriately motivating managers. We investigate drivers of managerial motivation, and propose how firms can use performance-pay to alter motivational patterns. We focus on the agent’s optimal effort decision in trading off compensation utility with effort cost in a static and dynamic setting. Surprisingly, we find that lower risk aversion or increased pay a...

We study the formation of cartels within two di¤erent contexts. First, we consider internal-external stability based models which, due to …rms’ free-riding incentives, lead to the inexistence of stable cartels. Second, we introduce the dynamic aspect of coalition formation. That is, when considering a cartel we consider also any cartel that can be reached through a succession of moves. Despite ...

Incentive compensation induces correlation between the portfolio of managers and the cash flow of the firms they manage. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their firms. We study the agency problem between shareholders and a manager when the manager can hedge his incentive compensation using financial markets and s...

This paper offers a brief overview of basic microtasking models and connects its developments with emerging management challenges that will need to be addressed in order to fully harness the capacities and skills of the crowd in different domain areas..

We present a novel theory of the employment relationship. A manager can invest in attention technology to recognize good worker performance. The technology may break and is costly to replace. We show that as time passes without recognition, the worker’s belief about the manager’s technology worsens and his effort declines. The manager responds by investing, but this investment is insufficient t...

In this paper, we investigate whether an increase in analyst monitoring, which improves the informational efficiency of stock prices, necessarily translates into firms’ managers taking more value-enhancing decisions (“real efficiency”). We show that when the manager’s compensation is tied to stock prices, then an increase in analyst monitoring weakens managerial incentives by making the firm’s ...

The nonlinear relationship between corporate value (Tobin's Q) and managerial ownership is well documented. This has commonly been attributed to the onset of managerial entrenchment, which results in a decrease of corporate value for increasing levels of managerial holdings. We propose a more complex structure for the corporate value { managerial ownership function, which accounts for the e®ect...