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| Antle, Rick; Bogetoft, Peter; Stark, Andrew W.. |
| The purpose of this paper is to study the effects of introducing information systems into a model featuring managerial incentive problems and investment opportunities that are mutually exclusive over time. In a principal-agent model in which a manager (agent) has superior information about investment costs, we introduce information systems, the signals from which are available to both the manager and the owner of the investment opportunity, which allow the owner to decrease the manager's informational advantage. We examine (i) the characteristics of the optimal information systems; (ii) the effects of such information systems on the owner's investment and compensation choices and on the value of the investment opportunity to the owner; (iii) the effects... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Labor and Human Capital. |
| Ano: 2000 |
URL: http://purl.umn.edu/24201 |
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| Antle, Rick; Bogetoft, Peter; Stark, Andrew W.. |
| We characterize optimal investment and compensation strategies in a model of an investment opportunity with managerial incentive problems, caused by asymmetric information over investment costs and the manager's desire to consume slack, and flexibility over the timing of its acceptance. The flexibility over timing consists of the opportunity to invest immediately, delay investment for one period, or not invest at all. The timing option provides an opportunity to invest when circumstances are most favorable. However, the timing option also gives the manager an incentive to influence the timing of the investment to circumstances in which he gets more slack. Under the assumption that investment costs are distributed independently over time, the optimal... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Labor and Human Capital. |
| Ano: 2001 |
URL: http://purl.umn.edu/24192 |
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