Abstract
OUR DISCUSSION IN Chapter 4 reveals that the various market mechanisms operating to discipline corporate managers do not perfectly align managers’ utility-maximizing interests with shareholders’ wealth-maximizing interests. Neither competition in product and factor markets (including capital markets), nor competition in the markets for corporate control and managerial labor, nor incentive contracts related to firm performance eliminate the conflict of interests between managers and shareholders. All of these mechanisms leave managers at least some discretion to use their positions to maximize personal utility rather than to enhance shareholder wealth.
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© 2000 Springer Science+Business Media Dordrecht
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Cortenraad, W.H.F.M. (2000). The Quest for Remedies: Markets, Monitoring and Managerial Liability. In: The Corporate Paradox. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-4619-1_6
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DOI: https://doi.org/10.1007/978-1-4615-4619-1_6
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4613-7088-8
Online ISBN: 978-1-4615-4619-1
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