 Behavioral Economics, Federalism and the Triumph of Stakeholder TheoryAllen Kaufman and Ernie Englander Chapter 4 in Corporate Social Responsibility and Corporate Governance, 2011, pp 73-98 from Palgrave Macmillan Abstract: Abstract As in the Cold War’s conclusion, when the Berlin Wall fell, stakeholder theory’s victory over financial agency theory occurred with a tumultuous event — the 2001 stock market crash. Financial agency theorists were left to concede that financial markets were less than perfect (Jensen, Murphy and Ruck, 2004; Jensen, 2002). Even Michael Jensen, agency theory’s most prominent apostle, proclaimed himself an ‘enlightened’ stakeholder advocate. This qualification permitted Jensen to distinguish himself from those managerial theorists who had for two decades resisted agency theory’s advance. Yet, his distance seems rather odd, given the recent widespread acceptance of behavioral economics and law. For, when these are incorporated into stakeholder theory, the contentious descriptive disagreements find a satisfactory resolution, leaving discord on that enduring ethical issue - a fair surplus divide. Keywords: Business Ethic; Corporate Governance; Stakeholder Theory; Behavioral Economic; Ultimatum Game (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-0-230-30211-2_4 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in International Economic Association Series from Palgrave Macmillan |
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