Call-Option Compensation and the Manager's Intertemporal Risk-Taking Behavior

15 Pages Posted: 9 Oct 2012

See all articles by Katarzyna Romaniuk

Katarzyna Romaniuk

Université de Paris 1 Panthéon-Sorbonne; Xi'an Jiaotong-Liverpool University (XJTLU)

Date Written: August 9, 2012

Abstract

This paper derives continuous-time conditions for a manager compensated with a call option to increase risk-taking. We show that the principles proposed by Ross (2004) in a one-period environment remain valid in continuous time.

Keywords: manager’'s compensation, call option, risk-taking, continuous-time modeling

JEL Classification: C61, D86, G11, G13

Suggested Citation

Romaniuk, Katarzyna, Call-Option Compensation and the Manager's Intertemporal Risk-Taking Behavior (August 9, 2012). Available at SSRN: https://ssrn.com/abstract=2159395 or http://dx.doi.org/10.2139/ssrn.2159395

Katarzyna Romaniuk (Contact Author)

Université de Paris 1 Panthéon-Sorbonne ( email )

17, rue de la Sorbonne
Paris, 75005
France

Xi'an Jiaotong-Liverpool University (XJTLU) ( email )

111 Renai Road, SIP
Suzhou, JiangSu province 215123
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
42
Abstract Views
428
PlumX Metrics