Abstract. In this essay, we show that in an Alchian-Demsetz firm, even in a finite period game setting, cooperative effort level amongst team members can be achieved when the output depends not only agents' effort but also their ability and that may explain why teams merit to sustain.
``A Rent Seeking Theory on CEOs' Compensation''
(.pdf file download),
Department of Economics, Concordia University, May 2001
``Andditional Introduction to: A Rent Seeking Theory on CEOs' Compensation''
(.pdf file download),
Department of Economics, Concordia University, July 2001
``Dynamic Principal-Agent Theory: A Survey''
(.pdf file download),
Department of Economics, Concordia University, December 1999.
``Altruism, Family Heritage, R&D, Political Rent Seeking and the Canadian Disease'',
forthcoming
``On the Optimal Compensation Scheme in Teams'',
(.pdf file download),
new 2001,>
``Double Moral Hazard in Teams'',
(.pdf file download),
new 2001,
An Empirical Study on Canadians' Unemployment Duration,
(HTML)
(.pdf file download),
June 1998
Understanding Term Structures: Evidence from Canadian Bond Market
, 1997,
Electronic file lost due to Department computer crash,
Analysis of Stock Prices and Implied Volatility under Geometric Brownian Motion: A Monte Carlo Approach,
Electronic file lost due to Department computer crash, 1998
A Comparative Study on Rent Competing and Rent Enlarging Games,
Electronic file lost due to Department computer crash 1997,
Double Moral Hazard, Extended Warranty and the Side-effect of Independent Insurers, forthcoming
Is Organized Corruption Less Harmful?
forthcoming,
``Optimal Political Hooliganism: the Case of Quebec'',
forthcoming ,
``Privatization and Impact On Environment: An Incentive Approach",
forthcoming ,
Abstract. It is shown in this paper that wealth and entrepreneurial ability have positive effects on CEOs' expenditures in obtaining and enlarging the rent if long term (call) stock options are granted with uncertainty. While rent seeking within the firms is becoming increasingly popular, we argue that it is an efficient screening mechanism in authority allocation.
This is a verbal survey of recent literature on CEO control on the Board and CEO stock option plans. Most are empirical and the existing results show that rent seeking like behaviours do exist in CEO appointment and/or entrenchment.
Abstract. Studies on dynamic optimal incentive contracting are reviewed. Attention is directed into a few topics including: renegotiation proofness, convergence to the first-best, linearity, career concerns, team issues, ratchet effect and comparable performance information.
Abstract. The Canadian disease refers to large family inherited firms usually overspend in political rent seeking and underinvest in R & D, commonly seen in large Canadian firms. We provide a theoretical foundation in interpreting this phenomenon. We claim that dynamic altrusim and undersupply of entrepreneurship may be the major reasons.
Abstract. This paper studies optimal incentive schemes in a team setting and we explicitly derive a closed form solution to the compensation scheme where the underlying output processes are correlated drifted Brownian motions. Some implications of the model are discussed.
Abstract. This paper studies the optimal incentive schemes in a small team managed firm where the owner of the firm has the option to quit from production and be a pure residual claimant. The optimal incentive scheme suggests that: 1, the dependence between earnings and firm's output should be higher for the firm owners when their actions affect the firm's output, even if they are risk-averse; 2, the incentive parameter for the managers should be higher if the owners of the firm do not participate in decision making and management.
Abstract. Using parametric and semi-parametric duration models, we empirically analyzed Canadians' unemployment duration. A variety of hazard functions are used including Weibull, log-normal, logistic and exponential. Censoring, exogenous variables and heterogeneity are treated in MLE. The comparison of the results from different model specification suports the common wisdom that previous working experience significantly shortens employment duration while genders, university education have insignificant effects.
Abstract. In this excercise, we empirically tested the pure expectation hypothesis (PEH) and expectation hypothesis (EH), using Canadian bond market data. We also examined Mankiw-Shapiro problem. Finally, we fit the eight different short term interest rate models using the same data set.
Abstract. Implied volatility of stock prices that follow underlying process of geometric Brownian motions are analyzed. Monte Carlo simulations are implemented to test the theoretical implications of Black-Scholes option pricing model. A delta hedging strategy is also given for a generated stock price path for over 20 weeks. Finally, assume that the stock and variance both follow geometric Brownian motion, and are bivariate normal, repeated samples of three methods of calculation: the crude method, the antithetical method, and the control variate method in estimating Black-scholes option pricing, are discussed.
Abstract. We study the effect of wealth and risk attitude on rent seeking behaviours. Different rent seeking activities are distinguished. Some sufficient conditions are given for positive effects to hold.
Abstract. Monopolistic extended product warranty offered by the manufacturer is commonly prohibited in Canada and US, rather, independent insurers are allowed to enter this market by law or regulators. In a double moral hazard framework where the consumer's maintenance and the manufacturer's effort on producing the product are not observable, we find competition in the extended warranty market may not be welfare increasing in an utilitarian government's point of view.
Abstract. Celentani and Ganuza (2001) argue that an illegal syndicate may reduce the corruption level by organizing the corruption. We model the organizard corruption in a double moral hazard scenario. In contrast, we find that the corruption level is unambiguously higher than that of competitive corruption. Furthermore, the principal can not perfectly extract rents by offering a menu of contracts.
