Lying to Speak the Truth: Selective Manipulation and Improved Information Transmission

• 成果类型: Article
• 署名作者: Povel, Paul; Strobl, Guenter
• 署名单位: University of Houston System; University of Houston; University of Vienna
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13375
• 发表日期: 2024
• 页码: 4303-4352
• 关键词: NON-GAAP EARNINGS; equity incentives; optimal-contracts; management; COMPENSATION; disclosure; FRAUD; FIRMS; MODEL; cost

摘要

We analyze a principal-agent model in which an effort-averse agent can manipulate a publicly observable performance report. The principal cannot observe the agent's cost of effort, her effort choice, and whether she manipulated the report. An optimal contract links compensation to the realized output and the (possibly manipulated) report. Manipulation can be beneficial to the principal because it can make the report more informative about the agent's effort choice, thereby reducing the agent's information rent. This is achieved through a contract that incentivizes the agent to selectively engage in manipulation based on her effort choice.