A risk-neutral principal considers hiring one agent to improve a valuable, observable outcome. Who to hire? How to motivate? In this paper, the principal designs an incentive contract that pays according to the realized outcome and sells the contract to an agent through an auction. The paper...

This paper analyzes the transfer pricing decision of the multinational firm (MNF). There are differences in profit tax rates between home-country and host-country. The MNF determines the transfer price to its overseas affiliate and delegates the responsibility of deciding on the final sales...

In this paper, we assume that a small- and micro-sized enterprise (SME) funds the expansion investment cost through bank-tax-guarantee (BTG, henceforth) which embeds two credit enhancement mechanisms by taxation and guarantee. We develop a capital structure model to exhibit a trade-off between...

We explore the relationship between non-manipulability via merging (splitting) and strong non-manipulability via merging (splitting). We show that although, in general, these non-manipulability properties are not equivalent, under the principle of solidarity, fulfilled by a wide range of...

When individuals have questions about Federal benefits, services, and legal rules, they are increasingly seeking help from government chatbots, virtual assistants, and other automated tools. Current forms of automated legal guidance platforms include the U.S. Citizenship and Immigration...

The COVID-19 pandemic has accelerated ongoing developments in decision-making, which bring the notion of risk and the agencies responsible for its assessment and management at the forefront of the government agenda. The current centrality of risk regulation is dictated by the commitment by...

Lie-aversion and lying costs should be included in models because disclosing hidden information enriches basic theory. The agent in our principal-agent model has an exogenous lying cost. If it is high enough, she can be offered a first-best contract. If not, a modified contract outperforms the...

In Closer Look, we highlight significant “holes” in our knowledge of corporate governance. These are central issues where insufficient or inadequate study has left us unable to answer basic questions, and where key assumptions relied upon by experts have not been verified or validated. While...

We examine the relation between managerial incentives and disclosure. Specifically, we examine how contracts that explicitly evaluate managers relative to peer performance are associated with: (1) the transparency of mandatory disclosure; (2) the provision of voluntary disclosure; and (3) the...

PurposeThe main aim of this paper is to examine auditor choice and audit fees in family firms on the Tehran Stock Exchange.Design/methodology/approachThe hypotheses set are tested by analysing all firms except financial firms listed on the Tehran Stock Exchange for the period of 10 years, using...