Explain how managerial overconfidence can be efficient when the firm provides contractual incentives to its manager.

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Behavioral Finance

ISBN: 9780190868741

1st Edition

Authors: H. Kent Baker, Greg Filbeck, John R. Nofsinger

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Question Posted: Feb 23, 2024 04:00 AM

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Explain how managerial overconfidence can be efficient when the firm provides contractual incentives to its manager.

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When a firms riskneutral shareholders hire a manager to make investment decisions on thei...View the full answer

Behavioral Finance

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