Motivating collusion

• 成果类型: Article
• 署名作者: Ha, Sangeun; Ma, Fangyuan; Zaldokas, Alminas
• 署名单位: Copenhagen Business School; Peking University; Peking University Shenzhen Graduate School (PKU Shenzhen); Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2024.103798
• 发表日期: 2024
• 关键词: Product market collusion; corporate governance; Managerial compensation

摘要

We examine how executive compensation can be designed to facilitate product market collusion. We look at the 2013 decision to close several regional offices of the U.S. Department of Justice, which lowered antitrust enforcement for firms located near these closed offices. We argue this made collusion more appealing to shareholders, and find that these firms increased the sensitivity of executive pay to local rivals' performance, consistent with rewarding the managers for colluding with them. The affected CEOs were also granted longer vesting periods, which provides long-term incentives that could foster collusive arrangements.