Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
10437724 | Journal of Economic Behavior & Organization | 2005 | 31 Pages |
Abstract
It has been recently noted that the trade-off between risk and incentives that agency theory predicts turns out to be rather weak. We examine predictions from agency theory on the basis of data from a data set encompassing close to 1000 Danish firms. We find that the relation between performance pay and environmental uncertainty is indeed weak. We examine the relation between delegation and environmental uncertainty, and find that this relation is confirmed. We also examine the multi-tasking agency hypothesis that as risk increases, the flexibility of agents is restricted. We fail to find support for this hypothesis.
Related Topics
Social Sciences and Humanities
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Economics and Econometrics
Authors
Nicolai J. Foss, Keld Laursen,