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Spagnolo, Giancarlo - 1999

This paper shows that as long as the stock market has perfect foresight, some dividends are distributed, and incentives are paid more than once or are deferred, stock-related compensation packages are strong incentives for managers to support tacit collusive agreements in repeated oligopolies....

Persistent link: https://www.econbiz.de/10011608499

Debt as a (credible) collusive device, or: "Everybody happy but the consumer"

Spagnolo, Giancarlo - 1999

The paper proposes a theory of the anti-competitive effects of debt finance based on the interaction between capital structure, managerial incentives, and firms' ability to sustain collusive agreements. It shows that shareholders' commitments that reduce conflicts with debtholders such as hiring...

Persistent link: https://www.econbiz.de/10011608557

Delegation and incentives

Bester, Helmut; Krähmer, Daniel - 2006

the agent is protected by limited liability, delegation is never optimal. …

Persistent link: https://www.econbiz.de/10010299113

Empowerment and the Dark Side of Delegation

Kräkel, Matthias - 2018

The existing delegation literature has focused on different preferences of principal and agent concerning project … selection, which makes delegating authority costly for the principal. This paper shows that delegation has a cost even when the … without task commitment and other behavioral effects the principal might forgo delegation though being efficient. …

Persistent link: https://www.econbiz.de/10011816561

Collusive effects of a monopolist's use of an intermediary to deliver to retailers

Teichmann, Isabel; von Schlippenbach, Vanessa - 2014

A manufacturer contracting secretly with several downstream competitors faces an opportunism problem, preventing it from exerting its market power. In an infinitely repeated game, the opportunism problem can be relaxed. We show that the upstream firm's market power can be restored even further...

Persistent link: https://www.econbiz.de/10010464624

Our product is unique: A note on a delegation game with differentiated products

Buchen, Clemens; Hartmann, Sven A.; Palermo, Alberto - 2021

consider a delegation game, for which the owner of a firm hires a manager who acts as if the good has a lower degree of … design an incentive scheme accordingly, which leads the manager to act in this way. Both firms rely on delegation. We discuss …

Persistent link: https://www.econbiz.de/10012598736

Financing asset growth

Brennan, Michael J.; Kraft, Holger - 2013

In this paper we provide new evidence that corporate financing decisions are associated with managerial incentives to report high equity earnings. Managers rely most heavily on debt to finance their asset growth when their future earnings prospects are poor, when they are under pressure due to...

Persistent link: https://www.econbiz.de/10010327802

Leaning against the wind: Debt financing in the face of adversity

Brennan, Michael J.; Kraft, Holger - 2016

We offer evidence of a new stylized feature of corporate financing decisions: the tendency of managers to rely more on debt financing when earnings prospects are poor. We term this 'leaning against the wind' and consider three possible explanations: market timing, precautionary financing, and...

Persistent link: https://www.econbiz.de/10012064286

Islamic profit and loss sharing contracting versus regular equity in entrepreneurial finance: Risk sharing and managerial incentives

Hadizada, Abdulali; Nippel, Peter - In: The Journal of Entrepreneurial Finance (JEF) 24 (2022) 2, pp. 209-247

An entrepreneur shares business risk with the investors providing capital for her firm. Risk sharing is per se beneficial, but also results in an agency problem from diminished incentives for the entrepreneur. This classical trade-off depends on the financial contracting between the entrepreneur...

Persistent link: https://www.econbiz.de/10015108119

Online trade platforms: Hosting, selling, or both?

Anderson, Simon; Bedre-Defolie, Özlem - In: International Journal of Industrial Organization 84 (2022), pp. 1-15

We illustrate conditions under which a trade platform selling its own products alongside third-party sellers benefits or harms consumers. This benefits consumers by lowering prices in a suite of models: a gatekeeper platform facing a competitive fringe of sellers, when fringe sellers also have...

Persistent link: https://www.econbiz.de/10013429071