2019 Fall

Syllabus

Reading Lists

• Kevin Murphy (1999), Executive Compensation, Chapter 38 in Handbook of Labor Economics
• Canice Prendergast (1999), The Provision of Incentives in Firms, Journal of Economic Literature
• Bengt Holmstrom (1982), Moral Hazard in Teams, Bell Journal of Economics
• Canice Prendergast (2002), The Tenuous Trade-off between Risk and Incentives, Journal of Political Economy
• Gibbons and Murphy (1990), Relative Performance Evaluation for Chief Executive Officers, ILR Review
• Jensen and Murphy (1990a), Performance Pay and Top-Management Incentives, Journal of Political Economy
• Jensen and Murphy (1990b), CEO Incentives - It's Not How Much You Pay But How, Harvard Business Review
• Hall and Liebman (1998), Are CEOs Really Paid Like Bureaucrats?, Quarterly Journal of Economics
• Edward Lazear (2003), Output-Based Pay: Incentives, Retention or Sorting?, IZA Discussion paper
• Edward Lazear (2000), Performance Pay and Productivity, American Economic Review
• Ellingsen and Kristiansen (2011), Paying for Staying: Managerial Contracts and the Retention Motive, NHH Discussion Paper

Contents

Lecture 15 (October 10) - The stylized facts about CEO pay and practices, Agency theory, Lecture Slides

Lecture 16 (October 14) - Agency theory (cont'd), Performance Measurement, Test of Theory

Lecture 17 (October 17) - Trade-off of Risk and Incentives, Estimation of Pay-Performance Sensitivity, Lecture Slides

Lecture 18 (October 21) - Other Roles of CEO Pay: Sorting and Retention

Student's Presentation (November 4, 7)