경영자 이직과 성과의 순차균형 모형 분석

This paper examines the relationship between management turnover and performances of firm with the application of sequential equilibrium model. In managerial labor market with information asymmetry about the type of management, separating equilibrium may not hold due to management turnovers. Hence, the firm(shareholders) designs and offers pooling compensation contract to the management based on their posterior belief on the management type with sequential rationality. In this mechanism where the compensation for management is determined by belief which is Bayesian-updating and hence sequentially consistent. In this environment the management has an incentive to acquire private benefit by maintaining unsuccessful business project and then moving to other firm. This is mainly because the performance-based compensation designed on reputation substantially unbalanced between good and bad reputation. Therefore, management turnover may lead to adverse selection in hiring management under asymmetric information on the management type. That is, management with low ability can select and maintain inappropriate business project generating loss to the firm while he turns over to hide himself in the reputation under mechanism of pooling contract. The possibility of turnover provides management with incentive and mechanism to implementing inappropriate decision resulting in the deterioration of project performances.