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Discussion Papers, Kellogg School of Management, Northwestern University >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/59641
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Full metadata record
| DC Field | | Value | | Language |
| dc.contributor.author | | Szydlowski, Martin | | en_US |
| dc.date.accessioned | | 2012-07-12T12:33:47Z | | - |
| dc.date.available | | 2012-07-12T12:33:47Z | | - |
| dc.date.issued | | 2011 | | en_US |
| dc.identifier.uri | | http://hdl.handle.net/10419/59641 | | - |
| dc.description.abstract | | I study the optimal choice of investment projects in a continuous time moral hazard model with multitasking. While in the first best, projects are invariably chosen by the net present value (NPV) criterion, moral hazard introduces a cutoff for project execution which depends on both a project's NPV as well as it's signal to noise ratio (SN). The cutoff shifts dynamically depending on the past history of shocks, current firm size and the agent's continuation value. When the ratio of continuation value to firm size is large, investment projects are chosen more efficiently, and project choice will depend more on the NPV and less on the signal to noise ratio. The optimal contract can be implemented with an equity stake, bonus payments, as well as a personal account. Interestingly, when the contract features equity only, the project selection rule resembles a hurdle rate criterion. | | en_US |
| dc.language.iso | | eng | | en_US |
| dc.publisher | | Northwestern Univ., Kellogg Graduate School of Management, Center for Mathematical Studies in Economics and Management Science Evanston | | en_US |
| dc.relation.ispartofseries | | Discussion Paper, Center for Mathematical Studies in Economics and Management Science 1525 | | en_US |
| dc.subject.jel | | D86 | | en_US |
| dc.subject.jel | | G11 | | en_US |
| dc.subject.jel | | G31 | | en_US |
| dc.subject.jel | | G32 | | en_US |
| dc.subject.jel | | M12 | | en_US |
| dc.subject.jel | | M52 | | en_US |
| dc.subject.ddc | | 330 | | en_US |
| dc.subject.keyword | | Continuous-time contracting | | en_US |
| dc.subject.keyword | | Project Choice | | en_US |
| dc.subject.keyword | | Multitasking | | en_US |
| dc.subject.keyword | | Bonus Payments | | en_US |
| dc.subject.keyword | | CEO Compensation | | en_US |
| dc.title | | Incentives, project choice and dynamic multitasking | | en_US |
| dc.type | | Working Paper | | en_US |
| dc.identifier.ppn | | 657059609 | | en_US |
| dc.rights | | http://www.econstor.eu/dspace/Nutzungsbedingungen | | en_US |
| Appears in Collections: | | Discussion Papers, Kellogg School of Management, Northwestern University
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