6533b861fe1ef96bd12c5921

RESEARCH PRODUCT

A new rationale for not picking low hanging fruits: The separation of ownership and control

Denis ClaudeMabel Tidball

subject

0106 biological sciences[QFIN]Quantitative Finance [q-fin]Compensation (psychology)Control (management)Separation (aeronautics)strategic delegation010501 environmental sciencesInvestment (macroeconomics)[SHS.ECO]Humanities and Social Sciences/Economics and Finance01 natural sciences[SHS]Humanities and Social Sciences010601 ecologyFinancial incentivesenergy paradoxStrategic delegationBusiness[SHS.ECO] Humanities and Social Sciences/Economics and Financebehavioral biasIndustrial organizationenergy efficiency0105 earth and related environmental sciencesGeneral Environmental ScienceEfficient energy use

description

Recent attempts at explaining the energy-efficiency gap rely on considerations related to organizational and behavioral/cognitive failures. In this paper, we build on the strategic delegation literature to advance a complementary explanation. It is shown that strategic market interaction may encourage business owners to instill a bias against energy efficiency in managerial compensation contracts. Since managers respond to financial incentives, their decisions will reflect this bias, resulting in lack of investment.

yearjournalcountryeditionlanguage
2019-06-01
https://hal.umontpellier.fr/hal-02316599