ΠΑΝΕΠΙΣΤΗΜΙΟ ΠΕΙΡΑΙΩΣ
ΣΧΟΛΗ ΧΡΗΜΑΤΟΟΙΚΟΝΟΜΙΚΗΣ ΚΑΙ ΣΤΑΤΙΣΤΙΚΗΣ ΤΜΗΜΑ ΧΡΗΜΑΤΟΟΙΚΟΝΟΜΙΚΗΣ ΚΑΙ ΤΡΑΠΕΖΙΚΗΣ ΔΙΟΙΚΗΤΙΚΗΣ

UNIVERSITY OF PIRAEUS
SCHOOL OF FINANCE AND STATISTICS
DEPARTMENT OF BANKING AND FINANCIAL MANAGEMENT

The Department of Banking and Financial Management announces the upcoming seminar with
Prof. Florian Hoffmann, University of Bonn

“Only Time will Tell- A theory of Deferred Compensation”

Seminar Organizers: Assist. Prof. Michail Anthropelos, Prof. George Skiadopoulos

Abstract: We characterize optimal contracts in settings where the principal observes informative signals over time about the agent’s one-time action. If both are risk-neutral contract relevant features of any signal process can be represented by a deterministic “informativeness” process that is increasing over time. The duration of pay trades off the gain in informativeness with the costs resulting from the agent’s liquidity needs. The duration is shorter if the agent’s outside option is higher, but may be non-monotonic in the implemented effort level. We discuss various applications of our characterization, such as to compensation regulation or the optimal maturity structure of an entrepreneur’s financing decisions.

Jonathan Berk is Assistant Professor of Economics at the University of Bonn, Germany. He holds a PhD in Economics from Goethe University Frankfurt and his work has appeared in the Review of Financial Studies, the Journal of Economic Theory, and the Economic Journal.