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Bianchi, Milo
, Dana, Rose-Anne and Jouini, Elyès
(2021)
Shareholder heterogeneity, asymmetric information, and the equilibrium manager.
TSE Working Paper, n. 21-1181, Toulouse
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Abstract
Consider a Örm owned by shareholders with heterogeneous beliefs
and discount rates who delegate to a manager the choice of a production plan. The shareholders and the manager can trade contingent
claims in a complete asset market. Shareholders cannot observe the
chosen production plan and design a compensation scheme so that
at equilibrium the manager chooses the plan they prefer and reveals
it truthfully. We show that at equilibrium i) proÖt is maximized,
ii) the manager gets a constant share of production, iii) she has no
incentive to trade. We then show that such equilibrium exists if and
only if the manager has the same belief and discount rate as the
representative shareholder. This allows us to characterize the required characteristics of the manager as a function of shareholdersí
characteristics.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | January 2021 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | heterogeneous shareholders, asymmetric information, manager-shareholders equilibrium |
| JEL Classification: | D24 - Production; Cost; Capital and Total Factor Productivity; Capacity D51 - Exchange and Production Economies D53 - Financial Markets D70 - General G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure G34 - Mergers; Acquisitions; Restructuring; Corporate Governance |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 04 Mar 2021 10:26 |
| Last Modified: | 26 Sep 2022 13:57 |
| OAI Identifier: | oai:tse-fr.eu:125178 |
| URI: | https://publications.ut-capitole.fr/id/eprint/42322 |
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