Bisin, Alberto; Gottardi, Piero; Rampini, Adriano A. - In: Journal of the European Economic Association 6 (2008) 1, pp. 158-209
Incentive compensation induces correlation between the portfolio of managers and the cash flow of the firms they manage. This correlation exposes managers to risk and hence gives them an incentive to hedge against the poor performance of their firms. We study the agency problem between...
