Board structures around the world: An experimental investigation

Ann B. Gillette, Thomas Noe () and Michael J. Rebello

No 2007-04, Experimental Economics Center Working Paper Series from Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University

Abstract: We model and experimentally examine the board structure-performance relationship. We examine single-tiered boards, two-tiered boards, insider-controlled boards, and outsider-controlled boards. We find that even insider-controlled boards frequently adopt institutionally preferred rather than self-interested policies. Two-tiered boards adopt institutionally preferred policies more frequently, but tend to destroy value by being too conservative, frequently rejecting good projects. Outsidercontrolled single-tiered boards, both when they have multiple insiders and only a single insider, adopt institutionally preferred policies most frequently. In those board designs where the efficient Nash equilibrium produces strictly higher payoffs to all agents than the coalition-proof equilibria, agents tend to select the efficient Nash equilibria.

Pages: 40
Date: 2007-04
New Economics Papers: this item is included in nep-cbe and nep-ppm
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Citations: View citations in EconPapers (4)

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Journal Article: Board Structures Around the World: an Experimental Investigation (2008)
Working Paper: Board structures around the world: An experimental investigation (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:exc:wpaper:2007-04

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