Matching Firms, Managers, and Incentives

We provide evidence on the match between …rms, managers, and incentives using anew survey that contains information on managers' risk preferences and human capital,on their compensation schemes, and on the …rms they work for. The data is consistentwith the equilibrium correlations predicted by a model where …rms with di¤erent owner-ship structure and managers with di¤erent risk aversion and talent match endogenouslythrough incentive contracts. The model predicts and the data support that, compared towidely-held …rms, family …rms use contracts that are less sensitive to performance; thesecontracts attract less talented and more risk averse managers; these managers work lesshard, earn less, and display lower job satisfaction.[...]