Talking Down the Firm: Short-Term Market Manipulation and Optimal Management Compensation
This paper analyzes the optimal use of short and long-term share prices in management incentive contracts. A key innovation of our model is that the short-term share price is determined even before the manager has made her effort choice and therefore cannot be informative in the standard principl-agent sense.
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Web page: http://economics.anu.edu.au/economics.htm
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