Wall Street Occupations

• 成果类型: Article
• 署名作者: Axelson, Ulf; Bond, Philip
• 署名单位: University of London; London School Economics & Political Science; University of Washington; University of Washington Seattle
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12244
• 发表日期: 2015
• 页码: 1949-1996
• 关键词: repeated moral hazard; one-sided commitment; PRIVATE EQUITY; CONTRACTS; AGENCY; INVESTMENT; DYNAMICS; MARKET; wages; RISK

摘要

Many finance jobs entail the risk of large losses, and hard-to-monitor effort. We analyze the equilibrium consequences of these features in a model with optimal dynamic contracting. We show that finance jobs feature high compensation, up-or-out promotion, and long work hours, and are more attractive than other jobs. Moral hazard problems are exacerbated in booms, even though pay increases. Employees whose talent would be more valuable elsewhere can be lured into finance jobs, while the most talented employees might be unable to land these jobs because they are too hard to manage.