TY  - RPRT
CY  - Toulouse
ID  - publications43830
UR  - http://tse-fr.eu/pub/125984
A1  - Bianchi, Milo
A1  - Dana, Rose-Anne
A1  - Jouini, Elyes
Y1  - 2021/04/16/
N2  - Consider a rm owned by shareholders with heterogeneous beliefs and run by a manager who chooses random production plans. Shareholders do not observe the chosen plan but only its realization. The nancial market consists of assets contingent on production realizations. A contract for the manager species her compensation as a function of the rms production and possibly some restrictions to trade in the nancial market. Shareholders are unrestricted. We dene a concept of equilibrium between the manager and shareholders such that the equilibrium production plan is unanimously preferred by the manager and the shareholders, markets clear and the manager has no incentive to cheat. We rst analyze the properties of such equilibria and in particular show that the contract should restrict the manager from trading. We next provide a framework where such equilibria exist. We lastly study the properties of equilibrium compensations when shareholders have beliefs that can be ranked in terms of optimism towards the equilibrium plan. Specic attention is given to their departure from linear compensations.
PB  - TSE Working Paper
T3  - TSE Working Paper
KW  - heterogeneous beliefs
KW  - asymmetric information
KW  - manager-shareholders equi-
KW  - librium.
M1  - working_paper
TI  - Equilibrium CEO contract with belief heterogeneity
AV  - public
EP  - 39
ER  -