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- W2151383463 abstract "In this paper we analyze the optimal contract for a portfolio manager who can exert effort to improve the quality of a private signal about future market prices. We assume complete markets over states distinguished by asset payoffs and place no restrictions on the form of the contract. We show that trading restrictions are essential because they prevent the manager from undoing the incentive effects of performance-based fees. We provide conditions under which simple benchmarking emerges as optimal compensation. Additional incentives to take risk are necessary when information can be manipulated or else the manager will understate information to offset the benchmarking." @default.
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- W2151383463 date "2009-09-10" @default.
- W2151383463 modified "2023-09-27" @default.
- W2151383463 title "Portfolio Performance and Agency" @default.
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- W2151383463 doi "https://doi.org/10.1093/rfs/hhp056" @default.
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