We show that, in the presence of correlated investment opportunities across firms, risk sharing between firm shareholders and firm managers leads to compensation contracts that include relative performance evaluation. These contracts bias investment choices towards correlated investment...

We show that, in the presence of correlated investment opportunities across firms, risk sharing between firm shareholders and firm managers leads to compensation contracts that include relative performance evaluation. These contracts bias investment choices towards correlated investment...

This paper explains the variations in incidence of accounting fraud across economic settings by putting the behavior and motivation of managers under the microscope. To safeguard their reputation in the managerial labor market, managers of firms that perform poorly are prone to fraudulently...

Although often applied in other social sciences, text mining has been less frequently used in economics and in policy circles, particularly inside central banks. This Handbook is a brief introduction to the field, discussing how text mining is useful for addressing research topics of interest to...

How does the mandated disclosure of executive compensation affect the dynamics of compensation within a peer group of firms? We argue in this paper that, under plausible conditions, it will trigger a ratchet effect in the mean level of executive pay within the peer group and is accompanied, hand...