Author: Elias AlbagliPublisher:
ISBN:
Category :
Languages : en
Pages : 36
Book Description
Information Aggregation, Investment, and Managerial Incentives
Author: Elias AlbagliManagerial Incentives, Investment and Aggregate Implication
Author: Bengt HolmströmPublisher:
ISBN:
Category : Incentives in industry
Languages : en
Pages : 45
Book Description
Managerial Incentives, Corporate Investment, and Economic Preference
Author: Francisco CovasPublisher:
ISBN:
Category : Decision making
Languages : en
Pages : 268
Book Description
Reliability-Relevance Trade-Offs and the Efficiency of Aggregation
Author: Ronald A. DyePublisher:
ISBN:
Category :
Languages : en
Pages : 38
Book Description
This paper studies how an accountant's method of aggregating information in a financial report is affected by differences in the reliability and relevance of components of the report. We study a firm that hires an accountant to produce a report that reveals information to investors regarding the returns to the firm's past investments. In constructing the report, the accountant must combine information elicited from the firm's manager with other information directly observable to the accountant. The manager's information is assumed to be directly observable only by the manager and to be of superior quality to the other information available to the accountant. Reliability-relevance trade-offs arise because as the accountant places more weight on the manager's report, potentially more useful information gets included in the report, at the cost of encouraging the manager to distort his or her information to a greater extent. Capital market participants anticipate this behavior and price the firm accordingly. We show how the market's price response to the release of the firm's aggregate report, the efficiency of the firm's investment decisions, and the manager's incentives to manipulate the soft information under his or her control are all affected by - and affect - the aggregation procedure the accountant adopts. In addition, we identify a broad range of circumstances under which aggregated reports are strictly more efficient than disaggregated reports because aggregation tempers the manager's misreporting incentives. We also demonstrate that, as any given component of the aggregated accounting report becomes softer, the equilibrium level of the firm's investment diminishes and the market places greater weight on the remaining components of the report.
Information Acquisition, Resource Allocation and Managerial Incentives
Author: Oguzhan OzbasPublisher:
ISBN:
Category :
Languages : en
Pages : 42
Book Description
A manager's compensation contract and the level of resources available to him jointly influence his incentives to acquire information about different investment alternatives as well as his resource allocate decisions. We show that the optimal compensation contract induces investment allocations that are more aggressive than the first-best allocation conditional on available information. The optimal level of resources may be set above or below the first-best level, depending on whether desired total investment increases or decreases with information. Both types of equilibrium investment distortions are used to motivate information acquisition by the manager. Finally, we show that choice of the level of resources can be delegated to the manager without any loss in efficiency through appropriately linking managerial compensation to the level of resources requested.
Managerial Incentives, Corporate Investment, and Economic Performance
Author: Francisco CovasManagerial Incentives and Corporate Investment Decisions
Author: James Ah ChipPublisher:
ISBN:
Category : Corporations
Languages : en
Pages : 160
Book Description
Handbook of the Economics of Finance
Author: G. ConstantinidesPublisher: Elsevier
ISBN: 9780444513632
Category : Business & Economics
Languages : en
Pages : 698
Book Description
Arbitrage, State Prices and Portfolio Theory / Philip h. Dybvig and Stephen a. Ross / - Intertemporal Asset Pricing Theory / Darrell Duffle / - Tests of Multifactor Pricing Models, Volatility Bounds and Portfolio Performance / Wayne E. Ferson / - Consumption-Based Asset Pricing / John y Campbell / - The Equity Premium in Retrospect / Rainish Mehra and Edward c. Prescott / - Anomalies and Market Efficiency / William Schwert / - Are Financial Assets Priced Locally or Globally? / G. Andrew Karolyi and Rene M. Stuli / - Microstructure and Asset Pricing / David Easley and Maureen O'hara / - A Survey of Behavioral Finance / Nicholas Barberis and Richard Thaler / - Derivatives / Robert E. Whaley / - Fixed-Income Pricing / Qiang Dai and Kenneth J. Singleton.
Managerial Incentives, Accounting for Interest Costs and Capital Investment Decisions of the Firm
Author: Ramachandran RamananPublisher:
ISBN:
Category :
Languages : en
Pages : 138
Book Description
Market Microstructure
Author: Daniel F. SpulberPublisher: Cambridge University Press
ISBN: 9780521659789
Category : Business & Economics
Languages : en
Pages : 412
Book Description
Professor Spulber demonstrates how the intermediation theory of the firm explains firm formation by showing why firms arise in a market equilibrium with costly transactions. In addition, the theory helps explain how markets work by.