Preventing Abuse by Controlling Shareholders

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Abstract

Abstract: This paper is a comment on Ronald Gilson and Alan Schwarz “Constraints on Private Benefits of Control: Ex Ante Control Mechanisms versus Ex Post Transaction Review”. Together with that paper it will appear in the Journal of Institutional and Theoretical Economics 169 (1) in 2013, in a special issue devoted to Behavioral Theory of Institutions. I argue that the arguments of Gilson and Schwarz are convincing, but that the underlying assumptions may be stronger than the authors suggest. In particular, the G&S paper adopts a US shareholder perspective on corporate governance and is based on standard rationality assumptions. In this comment, I discuss whether and to what extent the recommendations are relevant in the EU context and whether the paper’s conclusions are robust when insights from behavioral economics are included.
Original languageEnglish
Place of PublicationTilburg
PublisherTILEC
Number of pages12
Volume2012-038
Publication statusPublished - 2012

Publication series

NameTILEC Discussion Paper
Volume2012-038

Keywords

  • Corporate Governance
  • Behavioral Economics

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