Alfred Wagenhofer

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Standard principal-agent theory is generally based on gross performance measures (i.e., before compensation expense), yet boards in practice also determine incentive compensation using net performance measures (i.e., after deducting compensation expense). In a multi-principal, multi-agent model where relative performance evaluation arises endogenously, we(More)
A widely held assumption in empirical research and policy making in capital markets is that increasing enforcement effectiveness improves financial reporting quality. In this paper, we show that it can be detrimental, even if enforcement is costless. We develop an agency model with a productive manager who can also engage in earnings management, an auditor,(More)
It is well-known that taxes affect risky investment decisions. Analytical studies indicate that tax rate increases (decreases) can foster (hinder) investment if there is flexibility, in particular when an exit option is available. We design an experiment based on an analytical model with binomial random walk and entry and exit flexibility. Contrasting the(More)
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