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Type: Journal article
Title: Incentives for research agents and performance-vested equity-based compensation
Author: Shan, Y.
Citation: Journal of Economic Dynamics and Control, 2019; 102:44-69
Publisher: Elsevier
Issue Date: 2019
ISSN: 0165-1889
Statement of
Yaping Shan
Abstract: This paper studies the agency problem between a firm and its research employees in a dynamic optimal contracting setting. We implement the optimal contract by a risky security, which can be created using the equity of the firm, and a sequence of performance-based holding requirements. This result provides a rationale for using performance-vested equity-based compensation in R&D-intensive start-up firms.
Keywords: Performance-vesting provisions; dynamic contract; R&D
Rights: © 2019 Elsevier B.V. All rights reserved.
RMID: 0030117978
DOI: 10.1016/j.jedc.2019.02.007
Appears in Collections:Economics publications

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