Unlikely sabotage: Comment on Bloomfield, Marvao, and Spagnolo

• 成果类型: Article
• 署名作者: Karpoff, Jonathan M.
• 署名单位: University of Washington; University of Washington Seattle
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2023.101606
• 发表日期: 2023
• 关键词: predation

摘要

Bloomfield, Marvao, and Spagnolo (2023) establish an interesting yet puzzling finding: Firms in concentrated industries that form cartels are more likely to use relative performance evaluation (RPE) compensation arrangements for their top managers. The paper interprets this as evidence that cartel members constrain managers' incentives to engage in costly sabotage when their compensation depends on their peer firms' performance. I argue that successful costly sabotage to gain an RPE advantage is extremely unlikely and that costly sabotage is more likely among cartel firms than non-cartel firms. It therefore is an unlikely explanation of the paper's main finding. I propose an alternative explanation, that RPE benchmarks include firms that are not cartel member firms.(c) 2023 Elsevier B.V. All rights reserved.