Elena S. Pikulina

Assistant Professor

Finance Division
Sauder School of Business
University of British Columbia

Email: elena (dot) pikulina (at) sauder.ubc.ca
Phone: +1 604 822 3314
2053 Main Mall, HA864
Vancouver BC
V6T 1Z2 Canada

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Working Papers

Preferences for Power, with Chloe Tergiman. Accepted at the Journal of Public Economics

Power—the ability to determine the outcomes of others—usually comes with various benefits: higher compensation, public recognition, etc. We develop a new game, the Power Game, and use it to 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 and are not driven by mistakes, confusion or signaling intentions. Using a series of additional experiments, we show that valuation of power (i) is higher when individuals directly determine outcomes of others as opposed to simply influence them; (ii) depends on how much discretion they have over those outcomes; (iii) is tied to relationships between individuals; and (iv) likely depends on the domain: value of power is salient in work-place settings but not necessarily in others. We establish that ignoring preferences for power may have large welfare implications. Consequently, our findings provide strong reasons for incorporating preferences for power in the study of political systems, labor contracts and work relationships.

Equity Market Reaction to Pay Dispersion: Evidence from CEO-worker Pay Ratio Disclosure , with Yihui Pan, Stephan Siegel, and Tracy Yue Wang. Current version: April 2020. First draft: August 2019. Revise and resubmit in the Journal of Finance.

Do equity investors care about pay dispersion and income inequality? We address this question by examining equity markets’ reaction and investors’ portfolio rebalancing in response to the first-time disclosure by U.S. public companies of the ratio of CEO to median worker pay in 2018. We find that firms disclosing high pay ratios experience significantly negative abnormal announcement returns. Additional evidence suggests that equity markets “dislike” high pay dispersion rather than high CEO pay or low worker pay. In the cross-section, firms whose shareholders have stronger prosocial preferences experience a significantly more negative market response to high pay ratios. Consistent with investors’ prosocial preferences moderating the initial market reaction, we find that during 2018 investors with stronger prosocial preferences rebalance their portfolios away from high pay ratio stocks relative to other investors. Overall, our results suggest that equity markets are concerned about high within-firm pay dispersion, and investors’ prosocial preferences with respect to income inequality are a channel through which high pay ratios negatively affect firm value.

Preferences for Autonomy in Pay, with Chloe Tergiman. Current version: January 2020.

A recent literature points to individuals having preferences for autonomy from others when it concerns how much they earn. Using a simple experiment we evaluate whether individuals exhibit preferences for autonomy without confounds present in the earlier work. We show that in their vast majority (close to 90%), individuals show no such preferences for autonomy. Our results suggest that the previously documented prevalence of autonomy preferences is likely due to risk attitudes, environment complexity, perceived uncertainty or beliefs, rather than preferences for autonomy in pay per se.

Contractual and tournament incentives in the mutual fund industry. Current version: Novermber 2015.

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.

Work in Progress

Implicit discrimination and human capital, with Daniel Ferreira

Interest rate experiences and mutual fund risk taking, with Carolin Pflueger

Labour heterogeneity and stock returns, with Hernan Ortiz-Molina

Culture and market behaviour: Do Chinese become less risk-seeking when they are out of China? with Luc Renneboog and Philippe N. Tobler


Pikulina, Elena and Chloe Tergiman (2020). Preferences for power. Journal of Public Economics 185 (2020): 104-173.

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