Information externalities, share-price based incentives and managerial behaviour

Journal of Economic Surveys

Volumn 10, Issue 1, 1996, Pages 1-21

  Grant, Simon ^a   King, Stephen ^a   Polak, Ben ^b  

^a AUSTRALIAN NATIONAL UNIVERSITY   (Australia)

^b YALE UNIVERSITY   (United States)

Author keywords

Information externalities; Share price based incentives

Indexed keywords

EID: 8844234337     PISSN: 09500804     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.1467-6419.1996.tb00001.x     Document Type: Article

References (56)

1. Abowd, J. (1990) Does performance-based managerial compensation affect corporate performance? Industrial and Labor Relations Review, 43, pp. 52s-73s.
2. Antle, R. and Smith, A. (1986) An empirical investigation of the relative performance evaluation of corporate executives, Journal of Accounting Research, v. 24, pp. 1-39.
3. Baker, G., Jensen, M. and Murphy, K. (1988) Compensation and incentives: practice vs. theory, The Journal of Finance, 43, pp. 593-616.
4. Banerjee, A. (1992) A simple model of herd behavior, The Quarterly Journal of Economics, 107, pp. 797-817.
5. Bebchuk, L. and Stole, L. (1993) Do short-term managerial objectives lead to under or over-investment in long-term projects?, The Journal of Finance. 48, pp. 719-729.
6. Bhagat, J., Brickley, J. and Lease, R. (1985) incentive effects of stock purchase plans, Journal of Financial Economics, 14, pp. 195-215.
7. Bhattacharya, S. (1979) Imperfect information, dividend policy, and 'the bird in the hand' fallacy, The Bell Journal of Economics, 10, pp. 259-270. Bizjak, J.M., Brickley, J. and Coles, J. (1993) Stock-based incentive compensation and investment behavior, Journal of Accounting and Economics, 16, pp. 349-372.
8. Bhattacharya, S. (1979) Imperfect information, dividend policy, and 'the bird in the hand' fallacy, The Bell Journal of Economics, 10, pp. 259-270. Bizjak, J.M., Brickley, J. and Coles, J. (1993) Stock-based incentive compensation and investment behavior, Journal of Accounting and Economics, 16, pp. 349-372.
9. Bikhchandani, S., Hirshleifer, D. and Welch, I. (1992) A theory of fads, fashion, custom and cultural change as informational cascades, The Journal of Political Economy, 100, pp. 992-1026.
10. Borland, J. (1992) Career concerns: Incentives and endogenous learning in labour markets, Journal of Economic Surveys, 6, pp. 251-270.
11. Brandenburger, A. and Polak, B. (1992) When managers cover their posteriors, Harvard University.
12. Bresnahan, T., Milgrom, P. and Paul, J. (1990) The real output of the stock exchange, CEPR Technical Paper, Stanford University.
13. Ciscel, D. and Carroll, T. (1980) The determinants of executive salaries: an econometric survey, Review of Economics and Statistics, pp. 7-13.
14. Coughlan, A. and Schmidt, R. (1985) Executive compensation, management turnover, and firm performance, Journal of Accounting and Economics, 7, pp. 43-66.
15. Diamond, D. and Verrecchia, R. (1982) Optimal managerial contracts and security prices, The Journal of Finance, 37, pp. 275-287.
16. Dybvig, P. and Zender, J. (1991) Capital structure and dividend irrelevance with asymmetric information, The Review of Financial Studies, 4, pp. 201-219.
17. Garvey, G. (1993) The principal-agent problem when the agent has access to outside markets, Economic Letters, 43, pp. 183-186.
18. Gibbons, R. and Murphy, K. (1990) Relative performance evaluation for chief executive officers, Industrial and Labor Relations Review, 43, pp. 30s-51s.
19. Grundfest, J. (1990) Subordination of American capital, Journal of Financial Economics, 27, pp. 89-114.
20. Hagerty, K., Ofer, A. and Siegel, D. (1992) Managerial compensation and the incentives to engage in far-sighted behavior, Working Paper NO. 89, Northwestern University.
21. Hansen, E. (1992) The role of asymmetric information in project financing decisions, Reserve Bank of New Zealand.
22. Harris, M. and Raviv, A. (1992) 'Financial contracting theory', in J-J. Laffont (ed) Advances in Economic Theory: Sixth World Congress, CUP, Cambridge.
23. Hart, O. and Holmstrom, B. (1987) The theory of contracts, in Advances in Economic Theory: Fifth World Congress, Bewley, T. ed., CUP.
24. Hirshleifer, D. (1992) Reputation, incentives and managerial decisions, in The New Palgrave Dictionary of Money and Finance.
25. Hirshleifer, D. (1993) Managerial Reputation and Corporate Investment Decisions, in Financial Management. 22, pp. 145-160.
26. Hirshleifer, D. and Chordia, T. (1992) Managerial Incentives to Manipulating the Timing of Project Resolution, UCLA AGSM working paper no. 21/90.
27. Hirshleifer, D. and Thakor, A. (1992) Managerial conservatism, project choice and debt, The Review of Financial Studies, 5, pp. 437-470.
28. Holmstrom, B. (1979) Moral hazard and observability, The Bell Journal of Economics, 10, pp. 74-91.
29. Holmstrom, B. (1982) Moral hazard in teams, The Bell Journal of Economics, 13, pp. 324-340.
30. Holmstrom, B. and Milgrom, P. (1991) Multitask principal-agent analyses: Incentive contracts, asset ownership and job design, Journal of Law, Economics and Organization, 7(Sp), s24-s52.
31. Holmstrom, B. and Tirole, J. (1993) Market liquidity and performance monitoring, Journal of Political Economy, 101, pp. 678-709.
32. Jensen, M. and Murphy, K. (1990) Performance pay and top-management incentives, Journal of Political Economy, 98, pp. 225-264.
33. Jensen, M. and Zimmerman, J. (1985) Management compensation and the managerial labor market, Journal of Accounting and Economics, 7, pp. 3-9.
34. Joskow, P. and Rose, N. (1995) CEO pay and firm performance: dynamics, asymmetries and alternative performance measures, NBER Working Paper No. 4976.
35. Joskow, P., Rose, N. and Shepard, A. (1993) Regulatory constraints on CEO compensation. Brookings Papers on Economic Activity: Microeconomics, pp. 1-58.
36. Joskow, P., Rose, N. and Wolfram, C. (1994) Political constraints on executive compensation: evidence from the electric utility industry, NBER Working Paper No. 4980.
37. King, S. (1995) Search with free riders, Journal of Economic Behavior and Organization, 26, pp. 253-271.
38. Lareker, D. (1983) The association between performance plan adoption and corporate capital investment, Journal of Accounting and Economics, 5, pp. 3-30.
39. Leland, H. E. and Pyle, D. H. (1977) Informational asymmetries, financial structure and financial intermediation, The Journal of Finance, 32, pp. 371-387.
40. Murphy, K. (1985) Corporate performance and managerial remuneration, Journal of Accounting and Economics, 7, pp. 11-42.
41. Myers, S. and Majluf, N. (1984) Corporate financing and investment decisions when firms have information that investors do not have, Journal of Financial Economics, 13, pp. 187-221.
42. Narayanan, M. (1985) Managerial incentives for short-term results, The Journal of Finance, 40, pp. 1469-1484.
43. Paul, J. M. (1991) Managerial myopia and the observability of future cash flows, The University of Michigan.
44. Paul, J. M. (1992) On the efficiency of stock-based compensation, The Review of Financial Studies, 5, pp. 471-502.
45. Ross, S. A. (1977) The determination of financial structure: the incentive-signalling approach, The Bell Journal of Economics, 8, pp. 23-40.
46. Sappington, D. (1991) Incentives in principal-agent relationships, Journal of Economic Perspectives, 5, pp. 45-66.
47. Scharfstein, D. and Stein, J. (1990) Herd behavior and investment, American Economic Review, 80, pp. 665-669.
48. Shleifer, A. and Vishny, R. (1990) Equilibrium short horizons of investors and firms, American Economic Review, Papers and Proceedings, 80, pp. 148-153.
49. Stein, J. (1988) Takeover threats and managerial myopia, Journal of Political Economy, 96, pp. 61-80.
50. Stein, J. C. (1989) Efficient capital markets, inefficient firms: A model of myopic corporate behavior, Quarterly Journal of Economics.
51. Thakor, A. (1990) Investment myopia and the internal organization of capital allocation decisions, Journal of Law, Economics and Organization, 6, pp. 129-154.
52. Thakor, A. (1993) Information, investment horizon, and price reactions, Journal of Financial and Quantitative Analysis, 28, pp. 459-482.
53. Trueman, B. (1986) The relationship between the level of capital expenditures and firm value, Journal of Financial and Quantitative Analysis, 21, pp. 115-129.
54. Warner, J., Watts, R. and Wruck, K. (1988) Stock prices and top management changes, Journal of Financial Economics, 20, pp. 461-492.
55. Weisbach, M. (1988) Outside directors and CEO turnover, Journal of Financial Economics, 20, pp. 431-460.
56. Welch, I. (1992) Sequential sales, learning and cascades, The Journal of Finance, 47, pp. 695-732.