Contracting with a quiet life manager
Eduard Alonso-Pauli ()
No 07.19, Working Papers from Universidad Pablo de Olavide, Department of Economics
The aim of this paper is to analyze how employees may affect firm's corporate governance. In particular, we analyze a shareholder-manager relationship through a principal-agent framework. The manager is the agent in charge of taking decisions for firm's success. Yet, when deciding, the manager takes into account employees' preferences, i.e. the manager wants to enjoy a "quiet life". Our result highlight that having a quiet-life manager is not necessarily linked to destroy value, as suggested in recent research. It might even recover part of the efficient decisions (at a cost borne by the shareholder).
Keywords: Quiet-life bias; Corporate Governance; Moral Hazard (search for similar items in EconPapers)
JEL-codes: L26 M14 D86 (search for similar items in EconPapers)
Pages: 25 pages
New Economics Papers: this item is included in nep-bec and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://www.upo.es/serv/bib/wps/econ0719.pdf First version, 2007 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:07.19
Access Statistics for this paper
More papers in Working Papers from Universidad Pablo de Olavide, Department of Economics Carretera de Utrera km.1, 41013 Sevilla. Contact information at EDIRC.
Bibliographic data for series maintained by Publicación Digital - UPO ().