Social and Behavioral Sciences Commons^™

Like A Jar Of Flies? A Study Of Self-Control In An Organizational Social Dilemma With Large Stakes, Matthew W. Mccarter, Jonathan R. Clark, Darcy Fudge Kamal, Abel Winn

Business Faculty Articles and Research

We study the practice of self-control in an organizational social dilemma when the stakes are large, using 47 years of vital census data from 18^th century Sweden. From 1750 to 1800, eighty percent of Sweden lived in a simple-structure organization called a bytvång or village commons. The amount of resources a village family received was a function of their size. During this period, crop failures left the population facing starvation. Using autoregressive time-series modeling, we test whether the people of Sweden continued to take steps toward increasing the stress on the commons by marrying and birthing children or practiced …

Macroeconomic Fluctuations As Sources Of Luck In Ceo Compensation, Hsin-Hui Chiu, Lars Oxelheim, Clas Wihlborg, Jianhua Zhang

Business Faculty Articles and Research

Macroeconomic fluctuations in interest rates, exchange rates, and inflation can be considered sources of good or bad “luck” for corporate performance if management is unable to adjust operations to these fluctuations. Based on a sample of 2,091 US firms, we decompose the impacts of macroeconomic fluctuations on three measures of CEO compensation. Our study provides empirical support for the importance of considering macroeconomic fluctuations in designing CEO incentive schemes. It adds to the managerial power literature on moral hazard and CEO compensation by pinpointing the obvious risk that the CEO in an asymmetric and non-linear reward system will be inclined …

Recognizing Macroeconomic Fluctuations In Value Based Management, Lars Oxelheim, Clas Wihlborg

Business Faculty Articles and Research

Value Based Management (VBM) has become a common tool for evaluating corporate strategies and projects from the perspective of shareholder value maximization, and can be an important input for corporate compensation systems. But traditional VBM frameworks make no systematic effort to distinguish between changes in performance attributable to macroeconomic fluctuations beyond management's control and changes in performance that reflect the intrinsic competitive position of the firm.

The authors have developed an approach for “filtering out” the impact of macroeconomic fluctuations on cash flows for purposes of performance evaluation. Such fluctuations are captured by changes in exchange rates, interest rates, and …