Dardan Gashi

Job Market Paper:

"Managerial Beliefs and Agency Conflicts" [PDF] [SSRN]  
To what extent do executive compensation contracts mitigate the consequences of biased managerial beliefs? I answer this question using a dynamic investment model with agency conflicts in which managers may hold distorted beliefs about future cash flows. The optimal contract adjusts incentives to managerial beliefs, affecting investment, compensation, and firm value. Using data on managerial sales forecasts, I structurally estimate the model and find substantial heterogeneity in the direction and magnitude of belief distortions. The estimated contracts largely offset the consequences of these distortions: counterfactually replacing managers’ estimated beliefs with rational beliefs would have only a marginal effect on shareholder value. The results show that the impact of managerial expectation distortions is shaped by the incentive contracts firms write around them.

Presentations: EFA Doctoral Tutorial 2026, 10th HEC Paris Finance PhD Workshop in Memory of Denis Gromb, 6th Research in Behavioural Finance Conference, FMARC Doctoral Tutorial 2026, SFI Research Days 2026, 42nd AFFI, 2nd HKU Next-Gen Finance, USC Marshall, SFI USI Lugano

Award: FMARC 2026 Best Doctoral Paper