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Information Externalities, Share-Price Based Incentives and Managerial Behaviour Author info | Abstract | Publisher info | Download info | Related research | Statistics Grant, Simon
King, Stephen
Polak, Ben
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We survey recent theoretical research on the effects of short-term share-price based managerial incentive schemes. Such schemes can induce inefficient managerial behaviour in both hidden action and hidden type contexts. These problems arise from informational asymmetries: managers take actions to manipulate the information flow rather than to maximize firm value. More generally, imperfect transmission of information between managers and shareholders or between managers of different firms can lead to similar distortions even when the parties' interests are aligned. Copyright 1996 by Blackwell Publishers Ltd
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Article provided by Blackwell Publishing in its journal Journal of Economic Surveys .
Volume (Year): 10 (1996)
Issue (Month): 1 (March)
Pages: 1-21
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Handle: RePEc:bla:jecsur:v:10:y:1996:i:1:p:1-21Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=0950-0804
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