We derive the optimal compensation contract in a principal-agent setting in which outcome is used to provide incentives for both effort and risky investments. To motivate investment, optimal compensation entails rewards for high as well as low outcomes, and it is increasing at the mean outcome...

It has long been recognized that competitive considerations play a central role in corporate voluntary disclosure practices. Yet, the ways in which competition and disclosure interact are sensitive to various factors, including both the nature of information and the nature of competitive...