Renegotiation-proof contracting, disclosure, and incentives for efficient investment

• 成果类型: Article
• 署名作者: Baranchuk, Nina; Dybvig, Philip H.; Yang, Jun
• 署名单位: Washington University (WUSTL); University of Texas System; University of Texas Dallas; Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2010.04.004
• 发表日期: 2010
• 页码: 1805-1836
• 关键词: Optimal contracting; renegotiation-proofness; Compensation disclosure; Forward-looking announcement

摘要

Disclosure by firms would seem to reduce investment inefficiency by reducing informational asymmetry. However, the impact of disclosure is endogenous and depends on incentives within the firm. Given optimal renegotiation-proof contracts, disclosing only accepted contracts does not solve the Myers-Majluf problem. What solves the problem is having either full transparency of all compensation negotiations or, more reasonably, additional forward-looking announcements. The model is robust to renegotiation in equilibrium, the order of moves, and moral hazard. The analysis illuminates disclosure regulation: forward-looking disclosure is beneficial when the manager's contract is optimal and induces truth-telling. (C) 2010 Elsevier Inc. All rights reserved.