Relative Wealth Concerns, Executive Compensation, and Managerial Risk-Taking
从理论上研究相对财富关切如何影响均衡契约和系统性风险，发现这种外部性会导致薪酬与运气挂钩，并可能加剧市场波动。
This paper theoretically examines how relative wealth concerns affect equilibrium contracting and systemic risk-taking. We find that such externalities can generate pay for luck as an equilibrium strategy. In expectation of pay for luck in other firms, tying managerial pay to luck provides insurance to managers against a compensation shortfall relative to executive peers. We also show that an effort-inducing mechanism exists: managers have additional incentives to exert effort in utilizing investment opportunities, which helps them keep up with their peers during industry movements; however, pay for luck that is efficient within firms can nonetheless exacerbate aggregate fluctuations, especially during periods of heightened market risk.