Odilon Camara (Alesina Seminar)

Today's Speaker

Odilon Camara (University of Southern California), "Shareholder Democracy and the Market for Voting Advice" (joint w/John Matsusaka and Chong Shu)

Abstract

In corporate elections, most votes are cast based on recommendations provided by for-profit proxy advisory companies. We develop a model of the voting advice market to explore how competition and demand for advice shape the slant of the advice offered. In the model, advisory firms compete via prices and advice procedures. Shareholders have heterogeneous goals, differing in the weight they place on financial returns versus nonfinancial ("social") returns. In equilibrium, advisory firms tailor their advice to the preference of the average investor, which can skew voting outcomes away from those that would prevail if investors had full information.

Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.

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All interested faculty and students are invited to attend.