Corporate Provision of Public Goods
研究当股东既关心利润也关心公共品时，经理人如何通过合同激励将更多利润投入公共品，使股东更穷但更幸福，并在公共品足够好时实现社会最优产出。
Milton Friedman famously suggested that firms ought not divert profits toward public goods because shareholders can better make these contributions themselves. Despite this, activist shareholders are increasingly successful in persuading firms to be “socially responsible.” We study firm behavior when shareholders care about public goods as well as profits and when managerial contracts reflect these concerns. Under these ideal conditions, managers redirect more profits toward public goods than shareholders would when acting separately—shareholders are poorer but happier. Further, so long as the public good is sufficiently desirable, the manager selects the socially optimal level of output, despite the mismatch between shareholder preferences and those of society at large. This paper was accepted by Joshua Gans, business strategy.