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SUMMARY:The (ir)resistible rise of agency rents
DTSTART:20141003T103000
DTEND:20141003T120000
DTSTAMP:20260916T014033Z
UID:b064d34675eba3bafa102c75a440801b7c582de18a9bbdc014ea7aa3
CATEGORIES:Conferences - Seminars
DESCRIPTION:Augustin LANDIER (Toulouse School of Economics\, France)\nThe 
 rents agents can extract from principals increase with the magnitude of in
 centive problems\, which the literature usually takes as given. We endogen
 ize it\, by allowing agents to choose technologies that are more or less o
 paque and correspondingly prone to agency problems. In our overlapping gen
 erations model\, agents compete with their predecessors. We study whether 
 the presence of old-timers earning low rents can keep young managers’ren
 t-seeking in check. With dynamic contracts\, long horizons help principals
  incentivize agents. Hence\, old agents are imperfect substitutes for youn
 g ones. This mutes down competition between generations\, especially if co
 mpensation deferral is strong. As a result\, young managers can opt for mo
 re opaque and complex technologies\, and therefore larger rents\, than the
 ir predecessors. Thus\, in equilibrium\, complexity and rents rise over ti
 me.
LOCATION:UNIL\, Extranef\, room 126 https://planete.unil.ch/plan/?local=EX
 T-126
STATUS:CONFIRMED
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