Title: INFORMATION EXTERNALITIES, SHARE‐PRICE BASED INCENTIVES AND MANAGERIAL BEHAVIOUR
Abstract:Abstract. We survey recent theoretical research on the effects of short‐term share‐price based managerial incentive schemes. Such schemes can induce inefficient managerial behaviour in both hidden act...Abstract. We survey recent theoretical research on the effects of short‐term share‐price based managerial incentive schemes. Such schemes can induce inefficient managerial behaviour in both hidden action and hidden type contexts. These problems arise from informational asymmetries: managers take actions to manipulate the information flow rather than to maximize firm value. More generally, imperfect transmission of information between managers and shareholders or between managers of different firms can lead to similar distortions even when the parties' interests are aligned.Read More
Publication Year: 1996
Publication Date: 1996-03-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 46
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