| Record ID | marc_loc_2016/BooksAll.2016.part38.utf8:107663232:2298 |
| Source | Library of Congress |
| Download Link | /show-records/marc_loc_2016/BooksAll.2016.part38.utf8:107663232:2298?format=raw |
LEADER: 02298cam a22002897a 4500
001 2010656027
003 DLC
005 20100521091154.0
007 cr |||||||||||
008 100520s2010 mau sb 000 0 eng
010 $a 2010656027
040 $aDLC$cDLC
050 00 $aHB1
100 1 $aEdmans, Alex.
245 10 $aRisk and the CEO market$h[electronic resource] :$bWhy do some large firms hire highly-paid, low-talent ceos? /$cAlex Edmans, Xavier Gabaix.
260 $aCambridge, MA :$bNational Bureau of Economic Research,$cc2010.
490 1 $aNBER working paper series ;$vworking paper 15987
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 5/20/2010.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"This paper presents a market equilibrium model of CEO assignment, pay and incentives under risk aversion and heterogeneous moral hazard. Each of the three outcomes can be summarized by a single closed-form equation. In assignment models without moral hazard, allocation depends only on firm size and the equilibrium is efficient. Here, talent assignment is distorted by the agency problem as firms involving higher risk or disutility choose less talented CEOs. Such firms also pay higher salaries in the cross-section, but economy-wide increases in risk or the disutility of being a CEO (e.g. due to regulation) do not affect pay. The strength of incentives depends only on the disutility of effort and is independent of risk and risk aversion. If the CEO affects the volatility as well as mean of firm returns, incentives rise and are increasing in risk and risk aversion. We calibrate the efficiency losses from various forms of poor corporate governance, such as failures in monitoring and inefficiencies in CEO assignment. The losses from misallocation of talent are orders of magnitude higher than from inefficient risk-sharing"--National Bureau of Economic Research web site.
700 1 $aGabaix, Xavier.
710 2 $aNational Bureau of Economic Research.
830 0 $aWorking paper series (National Bureau of Economic Research : Online) ;$vworking paper no. 15987.
856 40 $uhttp://www.nber.org/papers/w15987