O. Williamson’s Model of Managerial Discretion

A. Koutsoyiannis
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A. Koutsoyiannis: University of Waterloo

Chapter 17 in Modern Microeconomics, 1975, pp 371-383 from Palgrave Macmillan

Abstract: Abstract Williamson1 argues that managers have discretion in pursuing policies which maximise their own utility rather than attempting the maximisation of profits which maximises the utility of owner-shareholders. Profit acts as a constraint to this managerial behaviour, in that the financial market and the shareholders require a minimum profit to be paid out in the form of dividends, otherwise the job security of managers is endangered.

Keywords: Profit Maximizer; Indifference Curve; Managerial Discretion; Dividend Policy; Actual Profit (search for similar items in EconPapers)
Date: 1975
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DOI: 10.1007/978-1-349-15603-0_17

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