The Behavioral Agency Model and Innovation Investment: Examining the Combined Effects of CEO and Board Ownership

2021 ◽  
pp. 105960112110582
Author(s):  
Fabio Zona ◽  
Marco Zamarian
Keyword(s):  
Stock Options ◽  
Risk Preferences ◽  
Stock Ownership ◽  
Agency Model ◽  
Executive Incentives ◽  
Scant Attention ◽  
Italian Manufacturing Firms ◽  
Behavioral Agency ◽  
Board Ownership

The Behavioral Agency Model (BAM) offers a behavioral account of executive incentives, according to which the perceived threats to CEO wealth, that is, CEO risk bearing, influence a CEO’s propensity to undertake innovation investments. While examining stock options extensively, the extant BAM research devotes relatively scant attention to other forms of incentives, such as stock ownership, that are conducive to one source of risk bearing, that is, employment risk. Furthermore, with an emphasis placed on the CEO, much BAM research neglects the interactive risk preferences of the CEO and the board. This study refines the BAM and empirically explores the countervailing forces exerted by the CEO and board ownership. It elucidates that while CEO ownership exhibits an inverted U-shaped relationship with innovation investment, board ownership weakens that relationship. An exploratory test on a sample of 108 Italian manufacturing firms provides support for the hypothesized effects. The refined BAM sheds further light on executive incentives through a behavioral lens, by elucidating the role of stock ownership and the interactive risk preferences of the CEO and the board.

Executive Stock Options as Mixed Gambles: Revisiting the Behavioral Agency Model

2013 ◽  
Vol 56 (2) ◽  
pp. 451-472 ◽  
Author(s):  
Geoffrey P. Martin ◽  
Luis R. Gomez-Mejia ◽  
Robert M. Wiseman
Keyword(s):  
Stock Options ◽  
Executive Stock Options ◽  
Agency Model ◽  
Behavioral Agency

Does Greater Risk-Bearing in Stock Option Compensation Reduce the Influence of Problem Framing On Managerial Risk-Taking Behavior?

2011 ◽  
Vol 23 (1) ◽  
pp. 185-201 ◽  
Author(s):  
Kimberly Sawers ◽  
Arnold Wright ◽  
Valentina Zamora
Keyword(s):  
Risk Taking ◽  
Stock Options ◽  
Stock Option ◽  
Money Stock ◽  
Agency Model ◽  
Problem Framing ◽  
Managerial Risk ◽  
Option Compensation ◽  
Behavioral Agency ◽  
Stock Option Compensation

ABSTRACT: We examine the extent to which the behavioral agency model reflects the relation between greater risk-bearing in stock option compensation and managerial risk-taking. The behavioral agency model predicts that managers with greater wealth at stake will avoid risky projects that threaten their wealth. This greater risk-bearing effect moderates the problem-framing effect, which predicts that loss-averse managers will be more (less) risk-taking when choosing among loss (gain) projects. Using a 2 × 2 between-subjects experiment with 108 M.B.A. students acting as managers, we find that managers are more risk-taking in the loss context than in the gain context when they have at-the-money stock options but not when they have wealth at stake through in-the-money stock options. Further, we find that managers with in-the-money stock options are less risk-taking than managers with at-the-money stock options in the loss context. These findings support the behavioral agency model prediction that greater risk-bearing in stock option compensation (moving from at-the-money stock options to in-the-money stock options) reduces the problem framing effect on risk-taking behavior, particularly when the firm faces a loss decision context. Our results point to the importance of considering the implications of risk-bearing in stock option compensation for managers choosing risky projects that affect firm value.

CEO stock options and gender from the behavioral agency model perspective

2019 ◽  
Vol 17 (1) ◽  
pp. 68-88
Author(s):  
Luis Gomez-Mejia ◽  
J. Samuel Baixauli-Soler ◽  
Maria Belda-Ruiz ◽  
Gregorio Sanchez-Marin
Keyword(s):  
Stock Options ◽  
Agency Model ◽  
And Gender ◽  
Behavioral Agency

scholarly journals Behavioral Agency Model: A Target-Oriented Approach for Executive Incentives

2014 ◽  
Author(s):  
Robert F Bordley ◽  
Francesca Culasso ◽  
Elisa Giacosa ◽  
Luisa Tibiletti
Keyword(s):  
Agency Model ◽  
Executive Incentives ◽  
Oriented Approach ◽  
Behavioral Agency

The Role of General Risk Preferences in Messaging About COVID-19 Vaccine Take-Up

2020 ◽  
Author(s):  
Jennifer S. Trueblood ◽  
Abigail B. Sussman ◽  
Daniel O'Leary
Keyword(s):  
Risk Preferences

scholarly journals The Role of Risk Preferences in Responses to Messaging About COVID-19 Vaccine Take-Up

2021 ◽  
pp. 194855062199962
Author(s):  
Jennifer S. Trueblood ◽  
Abigail B. Sussman ◽  
Daniel O’Leary
Keyword(s):  
Large Scale ◽  
Risk Preferences ◽  
Herd Immunity ◽  
Disease Spread ◽  
Short Term ◽  
Policy Makers ◽  
Health Crisis ◽  
Flu Vaccine ◽  
Nationally Representative

Development of an effective COVID-19 vaccine is widely considered as one of the best paths to ending the current health crisis. While the ability to distribute a vaccine in the short-term remains uncertain, the availability of a vaccine alone will not be sufficient to stop disease spread. Instead, policy makers will need to overcome the additional hurdle of rapid widespread adoption. In a large-scale nationally representative survey ( N = 34,200), the current work identifies monetary risk preferences as a correlate of take-up of an anticipated COVID-19 vaccine. A complementary experiment ( N = 1,003) leverages this insight to create effective messaging encouraging vaccine take-up. Individual differences in risk preferences moderate responses to messaging that provides benchmarks for vaccine efficacy (by comparing it to the flu vaccine), while messaging that describes pro-social benefits of vaccination (specifically herd immunity) speeds vaccine take-up irrespective of risk preferences. Findings suggest that policy makers should consider risk preferences when targeting vaccine-related communications.

The ethics of experimental research employing intrusive technologies in tourism: A collaborative ethnography perspective

2021 ◽  
pp. 146735842199389
Author(s):  
Aaron Tham ◽  
Vikki Schaffer ◽  
Laura Sinay
Keyword(s):  
Eye Tracking ◽  
Experimental Research ◽  
Experimental Setting ◽  
Approval Process ◽  
Dichotomous Outcome ◽  
Scant Attention ◽  
Tourism And Hospitality ◽  
Collaborative Ethnography

This study probes the ethics of intrusive technologies for experimental research in tourism, through the lens of collaborative ethnography. Amidst the increasing uptake of technology to assess participant responses, the role of ethics in an experimental setting has received scant attention in tourism and hospitality. While intrusive technologies such as eye tracking, skin sensors and neuroscience headgear become more ubiquitous, the ethical boundaries of using such equipment are increasingly blurred and inconsistently approved. Seeking convergence of ethics concerning intrusive technologies is complicated when framing political spaces, target audiences and management of data obtained. Rather than view the role of intrusive technologies as a dichotomous outcome of ethical or unethical approaches, this paper argues that ethics needs to be contextually embedded with increased collaboration and co-creation in the application preparation and approval process.

THE EFFECT OF EXECUTIVE INCENTIVES ON TECHNOLOGICAL INNOVATION OF DECLINING ENTERPRISES – THE MODERATING EFFECT OF DECLINE DEGREE AND ORGANISATIONAL SLACK

2021 ◽  
Author(s):  
HAIYAN DUAN ◽  
KAMRAN AHMED ◽  
MARTHIN NANERE
Keyword(s):  
Technological Innovation ◽  
Executive Control ◽  
Synergistic Effects ◽  
Moderating Effects ◽  
Executive Incentives ◽  
Different Types ◽  
And Control ◽  
The Relationship ◽  
Equity Incentive

We examine the effects of different types of executive incentives on technological innovation of declining firms and the moderating effects of the degree of decline and organisational slack on executive incentives and enterprise technological innovation. We also assess the synergetic effects of different types of executive incentives on technological innovation of declining enterprises. We find the following: first, executive compensation incentive, equity incentive and control incentives are beneficial to promote technological innovation in declining enterprises. Second, the degree of decline negatively moderates the relationship between equity incentive and technological innovation. Third, organisational slack positively moderates the relationship between equity incentive and technological innovation, as well as the relationship between control incentives and technological innovation, especially for severely declining enterprises. Fourth, there are synergistic effects between executive control incentive and compensation incentive, control incentives and equity incentive on technological innovation. The contributions are as follows: first, taking declining enterprises as sample, we suggest that to increase the role of compensation incentive and equity incentive in promoting technological innovation in declining enterprises, the control incentives should be strengthened. Second, organisational slack should be fully exploited for severely declining enterprises so that executives should have the motivation and conditions to carry out technological innovation and further help declining enterprises to turnaround successfully.

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