ENGLISH

Employee Stock Option Compensation: A behavioral finance approach

By Florian Cornelis Wolff (auth.)

Book information

Publisher
Deutscher Universitätsverlag
Year
2004
ISBN
978-3-8244-8213-9, 978-3-322-81849-2
DOI
10.1007/978-3-322-81849-2
Language
english
Format
PDF
Filesize
11 MB (11596403 bytes)
Series
Management, Organisation und ökonomische Analyse 2
Edition
1
Pages
253\262
Orientation
yes
Scanned
yes
Time added
2013-08-01 04:00:00
Human Resource Management

Description

Stock options have become a common part of the compensation of executives in many companies. Their use has created a significant amount of controversy among academics as well as among the general public. Florian Cornelis Wolff addresses an aspect often overlooked in debate but crucial for assessment: How do executives themselves see their stock options? How do their personal expectations and risk preferences affect the value they assign to them? To answer these questions classical option valuation approaches need to be combined with recent findings from the field of behavioural finance. The result is quite surprising: It is because people behave irrationally that stock options may be worth their money.

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