Executive compensation in oligopolies: Sales, profits and pay

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

This chapter analyzes the owner-manager contracting problem for firms competing in imperfectly competitive markets. The strategic interdependence of firms results in optimal incentive contracts that either compensate or penalize managers for sales. The predictions of the model are tested empirically and estimates of contract coefficients are reported. The results fail to confirm the predictions of the theoretical model; however, the coefficient estimates suggest that while the effects of profits and sales on compensation vary significantly across firms and industries, managers of most firms are rewarded for increases in firm profits.

Original languageEnglish (US)
Title of host publicationAdvances in Applied Microeconomics
Pages101-122
Number of pages22
Volume8
StatePublished - 1999
Externally publishedYes

Publication series

NameAdvances in Applied Microeconomics
Volume8
ISSN (Print)02780984

Fingerprint

Profit
Executive compensation
Oligopoly
Managers
Prediction
Coefficients
Interdependence
Industry
Incentive contracts
Competitive market
Contracting
Owner-managers

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)

Cite this

Chopin, M. C. (1999). Executive compensation in oligopolies: Sales, profits and pay. In Advances in Applied Microeconomics (Vol. 8, pp. 101-122). (Advances in Applied Microeconomics; Vol. 8).

Executive compensation in oligopolies : Sales, profits and pay. / Chopin, Marc C.

Advances in Applied Microeconomics. Vol. 8 1999. p. 101-122 (Advances in Applied Microeconomics; Vol. 8).

Research output: Chapter in Book/Report/Conference proceedingChapter

Chopin, MC 1999, Executive compensation in oligopolies: Sales, profits and pay. in Advances in Applied Microeconomics. vol. 8, Advances in Applied Microeconomics, vol. 8, pp. 101-122.
Chopin MC. Executive compensation in oligopolies: Sales, profits and pay. In Advances in Applied Microeconomics. Vol. 8. 1999. p. 101-122. (Advances in Applied Microeconomics).
Chopin, Marc C. / Executive compensation in oligopolies : Sales, profits and pay. Advances in Applied Microeconomics. Vol. 8 1999. pp. 101-122 (Advances in Applied Microeconomics).
@inbook{900833ef55f34b7dbe59c4f9c44f1b34,
title = "Executive compensation in oligopolies: Sales, profits and pay",
abstract = "This chapter analyzes the owner-manager contracting problem for firms competing in imperfectly competitive markets. The strategic interdependence of firms results in optimal incentive contracts that either compensate or penalize managers for sales. The predictions of the model are tested empirically and estimates of contract coefficients are reported. The results fail to confirm the predictions of the theoretical model; however, the coefficient estimates suggest that while the effects of profits and sales on compensation vary significantly across firms and industries, managers of most firms are rewarded for increases in firm profits.",
author = "Chopin, {Marc C}",
year = "1999",
language = "English (US)",
isbn = "0762305762",
volume = "8",
series = "Advances in Applied Microeconomics",
pages = "101--122",
booktitle = "Advances in Applied Microeconomics",

}

TY - CHAP

T1 - Executive compensation in oligopolies

T2 - Sales, profits and pay

AU - Chopin, Marc C

PY - 1999

Y1 - 1999

N2 - This chapter analyzes the owner-manager contracting problem for firms competing in imperfectly competitive markets. The strategic interdependence of firms results in optimal incentive contracts that either compensate or penalize managers for sales. The predictions of the model are tested empirically and estimates of contract coefficients are reported. The results fail to confirm the predictions of the theoretical model; however, the coefficient estimates suggest that while the effects of profits and sales on compensation vary significantly across firms and industries, managers of most firms are rewarded for increases in firm profits.

AB - This chapter analyzes the owner-manager contracting problem for firms competing in imperfectly competitive markets. The strategic interdependence of firms results in optimal incentive contracts that either compensate or penalize managers for sales. The predictions of the model are tested empirically and estimates of contract coefficients are reported. The results fail to confirm the predictions of the theoretical model; however, the coefficient estimates suggest that while the effects of profits and sales on compensation vary significantly across firms and industries, managers of most firms are rewarded for increases in firm profits.

UR - http://www.scopus.com/inward/record.url?scp=35448973424&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=35448973424&partnerID=8YFLogxK

M3 - Chapter

AN - SCOPUS:35448973424

SN - 0762305762

SN - 9780762305766

VL - 8

T3 - Advances in Applied Microeconomics

SP - 101

EP - 122

BT - Advances in Applied Microeconomics

ER -