This study examines the effect of eliciting self-evaluations from employees on employee perceptions of performance and employer welfare in a compensation setting context where employees do not know their marginal contribution to firm welfare. The literature suggests that giving employees a voice...

The value of option grants to CEOs is defined in two different ways. Fair values are grant-date estimates of expected values from future option contract settlement. Payouts from exercise are realized values from option contract settlement. We refer to the cumulative difference between the fair...

In the case, David Johnson is cast as a young professional, someone happy to have found a full-time position with great career prospects during difficult economic times. The reader meets David when he is still new in his job and flattered that his boss, Good Grains' Controller Rebecca Carey, has...

Prior studies find that CEOs receive higher pay if the enterprise is more complex because more complex enterprises are, in theory, matched with the managerial skills of higher-ability CEOs. While multinational diversification is typically a characteristic of enterprise complexity, we argue that...

This study investigates whether the use of two different control structures (authority and contingent rewards) and different types of uncertainty (firm specific versus market uncertainty) have an impact on partner selection decisions. The results of an experimental study indicate that buyers...

Say-on-pay is a corporate governance mechanism through which investors cast a non-binding vote on executive compensation. Using an interactive-laboratory experiment, we examine the influence of say-on-pay on investors' perceptions of procedural fairness, their trust in boards of directors, and...

We study the efficiency of the negotiated transfer pricing mechanism proposed by Edlin and Reichelstein (1995) for solving a bilateral holdup problem in a multinational enterprise. Our main finding is that the proposed renegotiation procedure will generally not provide incentives for efficient...

This research examines escalation of commitment in team capital investment decisions and the extent to which it can be mitigated using a cognitive prime. Specifically, I examine the use of a cognitive prime as a way to mitigate escalation in two decision-making settings: (1) face-to-face team...

Academic and anecdotal evidence has consistently shown that incentive systems often provide short-term payouts without regard for long-term risk. To prevent managers from exploiting the potential horizon mismatch between outcomes of performance and risk taking, the owners of the firm must be...