Negotiating executive pay. How can psychological theories complement classical and behavioural economics?

Fahey, D, Davies, J and Allcock, D ORCID: https://orcid.org/0000-0002-6961-1470, 2017. Negotiating executive pay. How can psychological theories complement classical and behavioural economics? In: Australian and New Zealand Academy of Management (ANZAM), Melbourne, 5-8 December 2017.

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Abstract

Agency theory is the dominant economic model in executive pay research, assuming profit-making organisations and rent-seeking agents, whilst dismissing non-pecuniary motivations, behaviour and agent preference entirely. The assumption of rationality continues to underpin the design of executive compensation, despite ongoing criticism that the validity of agency theory is not represented in the empirical research. This literature review considers both economic and behavioural research in the context of executive pay. Furthermore, it argues in favour of challenging the status quo in a manner which is both different and complementary to the current rational choice models, and which recognises certain pay-related judgements are psychological in nature where individuals are constantly driven to evaluate their own options and abilities.

Item Type:	Conference contribution
Creators:	Fahey, D., Davies, J. and Allcock, D.
Date:	December 2017
Identifiers:	Number Type 1295491 Other
Divisions:	Schools > Nottingham Business School
Record created by:	Linda Sullivan
Date Added:	24 Feb 2020 14:08
Last Modified:	24 Feb 2020 14:08
URI:	https://irep.ntu.ac.uk/id/eprint/39267

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