Information Externalities Share Price Based Incentives and Managerial Behaviour
Date
1996
Authors
Grant, Simon
King, Stephen
Polak, Ben
Journal Title
Journal ISSN
Volume Title
Publisher
Wiley
Abstract
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.
Description
Keywords
Information externalities, share-price based incentive
Citation
Collections
Source
Journal of Economic Surveys
Type
Journal article
Book Title
Entity type
Access Statement
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Restricted until
2099-12-31