André Lapied

Employee Ownership: Management Entrenchment vs. Reward Management

Employee ownership is often used as a reward management tool but also as entrenchment mechanism. This paper develops a model suggesting that employee ownership policy reveals management quality. Good managers would use employee ownership as a reward management tool whereas bad managers would implement it for entrenchment motives. We bring about three main conclusions: (i) Bad managers use employee ownership as an entrenchment mechanism. (ii) This latter phenomenon increases the cost of employee ownership for good managers. (iii) Avoiding these problems necessitates that employee ownership policy should not be discretionary.

Economics and Finance of Risk and of the Future: Kast/Economics

Acknowledgements. General Introduction. Financial assets. Risks. Uncertainty and precaution. Problems: new methods and new instruments. Presentation of the book. PART I: INDIVIDUAL vs COLLECTIVE CHOICE. Introduction to Part I. 1. Risks in a Public Project: The Millau Viaduct. 2. Individual Valuations and Economic Rationality. 2.1 Preferences on consequences and utilities of decisions. 2.2 Decisions, acts and contingent assets. 2.3 Criterion and individual valuation: averaging. 2.4 A simple decision theoretic model. 2.5 A general criterion of individual valuation. 2.6 The two main criteria for decision-making in front of a known probability distribution: paradoxes and limitations. 3. Aggregation of Individual Choices. 3.1 Public choices. 3.2 Market aggregation of individual preferences. 4. Individual and Collective Risk Management Instruments. 4.1 Decision trees. 4.2 Optimisation under constraints: mathematical programming. 4.3 Risk and cost-benefit analysis. Concluding comments on Part I. PART II: RISK vs UNCERTAINTY. Introduction to Part II. 5. Insurable and Uninsurable Risks. 5.1 Insurance of risks with a known probability distribution. 5.2 Insurance of risks with uncertainties. 5.3 Non-insurable risks. 6. Risk Economics. 6.1 Laws of large numbers and the principles of insurance. 6.2 Risk aversion and applications to the demand for insurance 1. 6.3 Background risk. 6.4 Risk measures: variance and Value at Risk. 6.5 Stochastic dominance. 6.6 Aversion to risk increases. 6.7 Asymmetric information: moral hazard and adverse selection. 7. Marketed Risks. 7.1 A general theory of risk measurement. 7.2 Applications to risk valuation. 8. Management Instruments for Risk and for Uncertainty. 8.1 Choosing optimal insurance. 8.2 Insurance claims securitisation. 8.3 Valuing controversial risks. Concluding comments on Part II. PART III: STATIC vs DYNAMIC. Introduction to Part III. 9. Risk Businesses. 9.1 Lotteries and the gambling business. 9.2 Risks and investments. 9.3 Credit risk. 10. Valuation without Flexibilities. 10.1 The net present value. 10.2 Discounting. 10.3 Static models of financial market equilibrium pricing. 10.4 The value at risk. 11. Valuation with Options. 11.1 General theory of a dynamic measure of risks. 11.2 Applications to risk valuation. 12. Static and Dynamic Risk Instruments. 12.1 Static risk management instruments. 12.2 Managing flexibilities. Concluding comments on Part III. General Conclusion. 1. How to deal with controversies. 2. Look for market valuation. 3. Measuring time. References. Index.