International Corporate Governance

Wednesday, June 28, 2006

The House Money Effect

Here is an interesting link that gives some background on the use of the term "house money effect". I like this site because it gives some examples that are relevant to economics. I also find the "Related Words" links at the bottom pretty neat.

Some Incentive Articles...

A student asked me to recommend some articles on compensation systems and incentives, so I figured I would also put the list here. Note here that I'm not specifically addressing the issue of CEO compensation, but I can provide some resources for that as well if asked. Most of these articles should be available online through the HOLLIS catalog.

Holmstrom, Bengt and Paul Milgrom. 1991. “Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design.” Journal of Law Economics and Organizations 7: 24-52

Baker, George. 1992. “Incentive Contracts and Performance Measurement.” Journal of Political Economy 100:3.

Lazear, Edward and Sherwin Rosen. 1981. “Rank-Order Tournaments as Optimum Labor Contracts.” Journal of Political Economy 89:5 841-64.

Prendergast, Canice. 1999. “The Provision of Incentives in Firms.” Journal of Economic Literature 37:1 7-63.

Oyer, Paul. 1998. “Fiscal Year Ends and Non-Linear Incentive Contracts: The Effect on Business Seasonality.” Quarterly Journal of Economics. CXIII, 149-185.

Healy, Paul M. “The Effect of Bonus Schemes on Accounting Decisions.” Journal of Accounting and Economics 7 (1985): 85-107.

Courty, Pascal and Gerald Marschke, “M. “An Empirical Investigation of Gaming Responses to Explicit Performance Incentives,” Journal of Labor Economics forthcoming.

Roy, Donald. 1952. “Quota Restriction and Goldbricking in a Machine Shop” The American Journal of Sociology, 57:5 427-442.

You could also look at the articles that these reference for further resources.

An Alternative Way to Find Articles...

Some of you have expressed having problems with accessing materials on reserve. While not everything is available directly online through the Harvard Library system, many of the academic journal pieces can be found rather easily.

1. Go to
2. Click on "e-research (articles)" at the bottom left.
3. Scroll down and click on "Find E-Journals". (Note: For those of you writing research papers and such, the "Find E-Resources" link is also helpful to you. For economics-related topics, the two most useful sources here are EconLit, JSTOR and Lexis-Nexis.)
4. You can then search for the title of the journal with the desired article and go from there. You can also search for the article directly through EconLit or JSTOR, mentioned above.

It is probably useful to play around with these resources to familiarize yourselves with how they work.

Tuesday, June 27, 2006

Welcome to Econ S-1476!

Hi everyone! This is a site where I will answer questions that are pertinent to the class and will post some information that I think will be helpful to students but didn't have time to cover in section. Just as a reminder, the official course web site is located at: