Additionalmaterials1 - express itself in ways as seemingly...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
August 31, 2011 ECON 6000 Additional Study Materials #1 Instructor: Bram Gallagher Chapter one discusses the difference between for and not-for-profit firms. Keeping in mind the shareholder value maximizing objective of for-profit firms and the efficiency objective for not-for-profit firms, examine these two annual reports and the different information presented in them. Intel Corporation: http://www.intc.com/intelAR2010/ WWF: http://www.worldwildlife.org/who/financialinfo/2010AR/WWFBinaryitem18606.pdf Also discussed is the idea of the principal-agent (PA) problem. Though the example of RJR Nabisco's extravagant retreats and private jets is certainly illustrative, the PA problem can
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: express itself in ways as seemingly innocuous as the office thermostat. Below is a recent paper discussing energy usage stemming from the PA problem. In this example, the relationship is assumed to be tenant-owner rather than executive-shareholder, but on the bottom of page two is a line that neatly sums up the likelihood of the existence of a PA problem: A PA problem may exist whenever the payer is not the same agent as the decision-maker or the user. http://escholarship.org/uc/item/6p1525mg When reading, keep in mind the powerful incentive effects of the disconnect in objectives....
View Full Document

This note was uploaded on 09/27/2011 for the course FINACE 6710 taught by Professor Homaifar during the Spring '11 term at Middle Tennessee State University.

Ask a homework question - tutors are online