Executive stock options when managers are loss-averse

Posted: ska4ai Date: 23.05.2017

Chair for Corporate Finance, University of Mannheim and Sonderforschungsbereich This paper analyzes optimal executive compensation contracts when managers are loss averse. We establish the general optimal contract analytically and parameterize the model using data on compensation contracts for CEOs. Parameters for preferences are based on the experimental literature.

Executive Stock Options when Managers Are Loss-Averse - MADOC

Overall, the Loss Aversion-model dominates an equivalent Risk Aversion-model, especially with respect to its ability to predict options as part of the optimal contract. Our results suggest that loss aversion is a better paradigm for analyzing design features of stock options and for developing preference-based valuation models than the conventional model used in the literature.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large. Financial support from the Deutsche Forschungsgemeinschaft, SFBat the University of Mannheim, is gratefully acknowledged. Contact details of provider: This paper has been announced in the following NEP Reports: Citations Citations are extracted by the CitEc Projectsubscribe to its RSS feed for this item.

Lists This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS. Statistics Access and download statistics Corrections When requesting a correction, please mention this item's handle: See general information about executive stock options when managers are loss-averse to correct material in RePEc. For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: If you have authored this item and are not yet registered with RePEc, we encourage you to do it here.

This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about. If references are entirely missing, you can add them using this yesterdays stock market. If the full references list an item that is present in RePEc, but the system did not link to it, you can terrasse composite forexia with this form.

executive stock options when managers are loss-averse

Forex point and figure system review you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item.

If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation. Please note that corrections may take a couple of weeks to filter online forex broker indian the various RePEc services. IDEAS is a service hosted by the Research Division of the Federal Reserve Bank of St.

Author info Abstract Bibliographic info Download info Related research References Citations Lists Statistics Corrections. Dittmann, Ingolf Erasmus School of Economics Rotterdam Maug, Ernst Chair for Corporate Finance, University of Mannheim and Sonderforschungsbereich Spalt, Oliver Chair for Corporate Finance, University of Mannheim and Sonderforschungsbereich HTML HTML with abstract plain text plain text with abstract BibTeX RIS EndNote, RefMan, ProCite ReDIF JSON in new window.

No references listed on IDEAS You can help add them by filling out this form. Citations are extracted by the CitEc Projectsubscribe to its RSS feed for this item.