Board structures around the world: An experimental investigation
AbstractWe model and experimentally examine the board structure-performance relationship. We examine single-tiered boards, two-tiered boards, insider-controlled boards, and outsider-controlled boards. We find that even insider-controlled boards frequently adopt institutionally preferred rather than self-interested policies. Two-tiered boards adopt institutionally pre- ferred policies more frequently but tend to destroy value by being too conservative, frequently rejecting good projects. Outsider-controlled single-tiered boards, both when they have multiple insiders and only a single insider, adopt institutionally preferred policies most frequently. In those board de-signs where the efficient Nash equilibrium produces strictly higher payoffs to all agents than the coalition-proof equilibria, agents tend to select the efficient Nash equilibria.
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Bibliographic InfoPaper provided by Oxford Financial Research Centre in its series OFRC Working Papers Series with number 2008fe15.
Date of creation: 2008
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- Ann B. Gillette & Thomas H. Noe & Michael J. Rebello, 2008. "Board Structures Around the World: an Experimental Investigation," Review of Finance, European Finance Association, vol. 12(1), pages 93-140.
- Ann B. Gillette & Thomas H. Noe & Michael J. Rebello, . "Board structures around the world: An experimental investigation," Experimental Economics Center Working Paper Series 2007-04, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
- NEP-ALL-2008-03-08 (All new papers)
- NEP-CDM-2008-03-08 (Collective Decision-Making)
- NEP-PPM-2008-03-08 (Project, Program & Portfolio Management)
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