The Effects of Competition on Executive Behavior

摘要: Economists presume that competition spurs a firm to be more efficient by forcing it reduce its agency problems. This article investigates this presumption. It finds the effects of on executive behavior can decomposed into four effects, each which is potentially ambiguous sign. Theory thus offers no definitive defense also derives sets conditions under increased has presumed effect reducing In some sets, important are executive's expected income and goods (e.g., shirking) normal for executive. The shows an increase in shareholder bargaining strength both problem make sensitive competition.