This paper models the effect of disclosure on real investment. We show that, even if the act of disclosure is costless, a high-disclosure policy can be costly. Some information ("soft") cannot be disclosed. Increased disclosure of "hard" information augments absolute information and reduces the...

This paper models the effect of disclosure on real investment. We show that, even if the act of disclosure is costless, a high-disclosure policy can be costly. Some information ("soft") cannot be disclosed. Increased disclosure of "hard" information augments absolute information and reduces the...

In jüngerer Zeit werden im Rahmen der Investitionsbudgetierung zunehmend die Bedeutung wahrheitsinduzierender Budgetierungsverfahren wie des Groves-Mechanismus zur Überwindung von Anreizproblemen diskutiert. Charakteristisch für den Groves-Mechanismus ist, dass man bei der Performancemessung...

This study seeks to understand the relation between firm size and supervisory board composition. Specifically, we ask if and how firm size influences occupational and international background diversity in supervisory boards. Relying on resource dependence theory and theories of organizational...

Budgeting mechanisms help the CEO of a firm to restrict managerial discretion and therefore to mitigate the firm’s agency problems. By using flexible budgets, the CEO allows the managers to efficiently adapt their actions to changing economic conditions. Alternatively, rigid budgets result in...

In this paper I consider the impact of a noisy indicator regarding a manager’s manipulative behavior on optimal effort incentives and the extent of earnings management. The analysis in this paper extends a twotask, single performance measure LEN model by including a binary random variable. I...

We analyze a two-period agency problem with limited liability and nonverifiable information. The principal commits to a dynamic bonus pool comprising a fixed total payment that may be distributed over time to the agent and a third party. We find that the optimal two-period contract features...