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Felix Feng (U Washington)
2 February @ 3:00 pm - 4:30 pm
Location: Rouss Robertson Hall 227
Felix will present the following paper (preliminary work – draft not available).
Progress, Delays, and the Timeliness of Reporting
Abstract: This paper studies the optimal contractual arrangement when managers have private information about the progress and delays during firm operations or product development. The optimal contract may grant the manager a discretionary period during which he has full autonomy on whether and when to report any progress or delays. If success is not achieved by the end of the discretionary period, the manager is given the incentives to report his private information as soon as it becomes available via a soft deadline that comprises random extensions and termination. The optimal contracts display commonly observed features in practice and generate novel implications for the design of accounting standards and regulations for the timeliness of managerial disclosures.