Sauder School of Business
University of British Columbia
Email: elena (dot) pikulina (at) sauder.ubc.ca
Phone: +1 604 822 3314
2053 Main Mall, HA865
V6T 1Z2 Canada
Power—the ability to determine the outcomes of others—usually comes with various benefits: higher compensation, public recognition, etc. We demonstrate that a substantial fraction of individuals enjoy the intrinsic value of power: they accept a lower payoff in exchange for power over others, without any additional benefits to themselves. We show that preferences for power exist independently of other components of decision rights. Further, these preferences cannot be explained by social preferences, are stable over time and are not driven by mistakes, misunderstandings or individuals’ signaling intentions. We establish that ignoring preferences for power may have large welfare implications.
I study the impact of contractual incentives on the behavior of mutual fund managers in annual tournaments. I show that linear contracts as opposed to concave ones induce managers to make larger risk adjustments in response to their relative performance ranks. I argue that contracts with linear fee structure directly translate the convex relationship between past fund returns and fund size into a convex relationship between past performance and managerial pay, whereas concave contracts distort this relationship and make it less convex. I also demonstrate that higher fee rates encourage fund managers to engage into annual tournaments, as they strengthen the connection between fund size and managerial pay in comparison with lower fee rates. The above results are robust to controlling for funds characteristics, such as fund size, age and turnover, as well as year- and style-fixed effects.
Pikulina, Elena, Luc Renneboog, and Philippe N. Tobler. Do Confident Individuals Generally Work Harder? Journal of Multinational Financial Management 44 (2018): 51-60.
Pikulina, Elena, Luc Renneboog, and Philippe N. Tobler. Overconfidence and Investment: An Experimental Approach. Journal of Corporate Finance 43 (2017): 175-192. Experimental instructions.
Pikulina, Elena, and Luc Renneboog. 14. Serial Takeovers, Large Shareholders, and CEOs' Equity-Based Compensation. Research Handbook on Shareholder Power (2015): 297.
Pikulina, Elena, Luc Renneboog, Jenke Ter Horst, and Philippe N. Tobler. Bonus Schemes and Trading Activity. Journal of Corporate Finance 29 (2014): 369-389.
Drobyshevsky, Sergey, Sergey Narkevich, Elena Pikulina, and Dmitry Polevoy. Analysis of a possible bubble on the Russian real estate market. Gaidar Institute for Economic Policy Research Paper Series 128 (2009).
Mount Thompson summit view to the east, Canadian Rockies