TY  - JOUR
AU  - Stiglitz,Joseph E.
AU  - Edlin,Aaron S.
TI  - Discouraging Rivals: Managerial Rent-Seeking and Economic Inefficiencies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4145
PY  - 1997
Y2  - May 1997
UR  - http://www.nber.org/papers/w4145
L1  - http://www.nber.org/papers/w4145.pdf
N1  - Author contact info:
Joseph E. Stiglitz
Uris Hall, Columbia University
3022 Broadway, Room 212
New York, NY  10027
Tel: 212/854-0671
Fax: 212/662-8474
E-Mail: jes322@columbia.edu

Aaron Edlin
The Richard W. Jennings '39 Endowed Chair
University of California, Berkeley
Department of Economics and School of Law
Berkeley, CA   94720-7200
Tel: 510/642-4719
Fax: 510/642-3767
E-Mail: edlin@econ.berkeley.edu
AB  - We argue here for a broader view of the biases in managers' decisions: In general, managerial rent-seeking affects not only the level of investment, but also the form. Our basic hypothesis is simple: given the now well-established scope for managerial discretion, managers have an incentive to exercise that discretion to enhance their income. Any managerial contract is subject to renegotiation, and a manager's pay is the outcome of an often bewildering bargaining process between management, the board of directors, and rival management teams or takeover artists.
ER  -