Profit Sharing Between Managers and Investors: an Experimental Investigation

dc.contributor.author Öztürkkal, Belma
dc.contributor.author Öztürkkal, Ayşe Belma
dc.contributor.other International Trade and Finance
dc.date.accessioned 2019-06-27T08:02:19Z
dc.date.available 2019-06-27T08:02:19Z
dc.date.issued 2015
dc.department Fakülteler, İşletme Fakültesi, Uluslararası Ticaret ve Finans Bölümü en_US
dc.description.abstract This study analyzes the effect of interest and power structures and conflict of interest among managers and investors and tests the effect of different payout mechanisms on willingness to pay. In this study 74 student subjects are involved in a setting where the manager is determining his own compensation. A series of experiments that vary managers' ability to determine their own compensation and investors' ability to punish inappropriate behavior are reported. The experiments involve pairs of subjects consisting of an investor and a manager with asymmetric decision making powers. When managers compensate themselves inappropriately investors' recourse is to shun the company's shares-a model that arguably corresponds more closely to reality than the accepted efficient market traditional paradigm. The experiment shows that managers share profits even when investors cannot withhold investment and investors fairly compensate managers as well. This pattern explains both the ability of capital markets to function despite the presence of inherent moral hazard and occasional managerial misbehavior. Copyright (C) 2015 Borsa Istanbul Anonim Sirketi. Production and hosting by Elsevier B.V. en_US]
dc.identifier.citationcount 2
dc.identifier.doi 10.1016/j.bir.2015.02.002 en_US
dc.identifier.endpage 114
dc.identifier.issn 2214-8450 en_US
dc.identifier.issn 2214-8469 en_US
dc.identifier.issn 2214-8450
dc.identifier.issn 2214-8469
dc.identifier.issue 2
dc.identifier.scopus 2-s2.0-84954103770 en_US
dc.identifier.scopusquality Q1
dc.identifier.startpage 106 en_US
dc.identifier.uri https://hdl.handle.net/20.500.12469/595
dc.identifier.uri https://doi.org/10.1016/j.bir.2015.02.002
dc.identifier.volume 15 en_US
dc.identifier.wos WOS:000434507700004 en_US
dc.identifier.wosquality Q1
dc.institutionauthor Öztürkkal, Belma en_US
dc.language.iso en en_US
dc.publisher Elsevier Science Bv en_US
dc.relation.journal Borsa Istanbul Review en_US
dc.relation.publicationcategory Makale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı en_US
dc.rights info:eu-repo/semantics/openAccess en_US
dc.scopus.citedbyCount 3
dc.subject Behavioral finance en_US
dc.subject Payout policy en_US
dc.subject Experiment en_US
dc.title Profit Sharing Between Managers and Investors: an Experimental Investigation en_US
dc.type Article en_US
dc.wos.citedbyCount 2
dspace.entity.type Publication
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relation.isAuthorOfPublication.latestForDiscovery 4305087b-4178-478d-8846-9b1a77e8bfbe
relation.isOrgUnitOfPublication 16202dfd-a149-4884-98fb-ada5f8c12918
relation.isOrgUnitOfPublication.latestForDiscovery 16202dfd-a149-4884-98fb-ada5f8c12918

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