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dc.contributor.authorJackwerth, Jens Carstenen_US
dc.contributor.authorHodder, James E.en_US
dc.date.accessioned2009-09-17en_US
dc.date.accessioned2010-05-14T12:00:41Z-
dc.date.available2010-05-14T12:00:41Z-
dc.date.issued2008en_US
dc.identifier.piurn:nbn:de:bsz:352-opus-54367-
dc.identifier.urihttp://hdl.handle.net/10419/32178-
dc.description.abstractWe model a firm's value process controlled by a manager maximizing expected utility from restricted shares and employee stock options. The manager also dynamically controls allocation of his outside wealth. We explore interactions between those controls as he partially hedges his exposure to firm risk. Conditioning on his optimal behavior, control of firm risk increases the expected time to exercise for his employee stock options. It also reduces the percentage gap between his certainty equivalent and the firm's fair value for his compensation, but that gap remains substantial. Managerial control also causes traded options to exhibit an implied volatility smile.en_US
dc.language.isoengen_US
dc.publisherCoFE Konstanzen_US
dc.relation.ispartofseriesDiscussion paper series // Zentrum für Finanzen und Ökonometrie, Universität Konstanz 2008,07en_US
dc.subject.ddc330en_US
dc.titleManagerial responses to incentives: control of firm risk, derivative pricing implications, and outside wealth managementen_US
dc.typeWorking Paperen_US
dc.identifier.ppn608952346en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CoFE-Diskussionspapiere, Universität Konstanz

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