DC Field | Value | Language |
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dc.contributor.author | Kim, Hyung Seok | ko |
dc.date.accessioned | 2023-12-01T07:00:37Z | - |
dc.date.available | 2023-12-01T07:00:37Z | - |
dc.date.created | 2023-12-01 | - |
dc.date.created | 2023-12-01 | - |
dc.date.issued | 2023-06 | - |
dc.identifier.citation | Journal of Economic Theory and Econometrics, v.34, no.2, pp.73 - 92 | - |
dc.identifier.issn | 1229-2893 | - |
dc.identifier.uri | http://hdl.handle.net/10203/315582 | - |
dc.description.abstract | The present study considers a model of delegated management where risk-averse shareholders delegate their firm’s management to self-interested executives/ managers, but within the general equilibrium context of Pigouvian cycles. A socially optimal class of managers’ renumeration contracts is identified in this Pigouvian environment where business fluctuations could be driven by private-sector expectations that are unrelated to economic fundamentals. These general equilibrium considerations have two primary implications. First, the “pay-for-luck” phenomenon, largely emphasized in the executive compensation literature, arises as an aggregate equilibrium outcome, thereby providing a corollary resolution of the corresponding “pay-for-luck” puzzle. While rendering the CEO-to-worker pay ratio essentially irrelevant to social welfare, the delegated management economy with the manager’s first-best compensation contracts may produce economy-wide welfare losses more than one order of magnitude larger that the Lucasian cost-of-business-cycle estimate, which constitutes a second point. | - |
dc.language | English | - |
dc.publisher | Korean Econometric Society | - |
dc.title | The ‘Pay for Luck’ Puzzle: A Macroeconomist’s View | - |
dc.type | Article | - |
dc.identifier.scopusid | 2-s2.0-85165493883 | - |
dc.type.rims | ART | - |
dc.citation.volume | 34 | - |
dc.citation.issue | 2 | - |
dc.citation.beginningpage | 73 | - |
dc.citation.endingpage | 92 | - |
dc.citation.publicationname | Journal of Economic Theory and Econometrics | - |
dc.identifier.doi | 10.22812/jetem.2023.34.2.003 | - |
dc.identifier.kciid | ART002973456 | - |
dc.contributor.localauthor | Kim, Hyung Seok | - |
dc.description.isOpenAccess | N | - |
dc.type.journalArticle | Article | - |
dc.subject.keywordAuthor | Stochastic growth model | - |
dc.subject.keywordAuthor | delegated management | - |
dc.subject.keywordAuthor | executive compensation | - |
dc.subject.keywordAuthor | optimal contract | - |
dc.subject.keywordAuthor | Pigouvian cycles | - |
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