Seeking Alpha: Excess Risk Taking and Competition for Managerial Talent

• 成果类型: Article
• 署名作者: Acharya, Viral; Pagano, Marco; Volpin, Paolo
• 署名单位: New York University; University of Naples Federico II; City St Georges, University of London
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhw036
• 发表日期: 2016
• 页码: 2565
• 关键词: pay; INFORMATION

摘要

We present a model in which firms compete for scarce managerial talent (alpha) and managers are risk averse. When managers cannot move across firms after being hired, employers learn about their talent, efficiently allocate them to projects, and provide insurance to low-quality managers. When, instead, managers can move across firms, firm-level coinsurance is no longer feasible, but managers may self-insure by switching employer to delay the revelation of their true quality. However, this results in inefficient project assignment, with low-quality managers handling projects that are too risky for them. (JEL D62, G32, G38, J33)