By Bentley MacLeod
The finalists for the 2017 Williamsom Award were:
- "Competing for Relationships: Markets and Informal Institutions in Sierra Leone," by Tarek Ghani (WUSTL) and Tristen Reed (World Bank)
- “Common Ownership, Competition, and Top Management Incentives” by Miguel Anton (Universidad de Navarra), Florian Ederer (Yale University), Mireia Gine (Universidad de Navarra) and Martin C. Schmalz (University of Michigan).
Both are great papers. The committee finally choose “Common Ownership, Competition, and Top Management Incentives” for the 2017 Williamson Award. The paper is a beautiful combination of theory and evidence on how structure of ownership in an industry affect CEO compensation. The authors show theoretically and empirically that executives are paid less for their own firm’s performance and more for their rivals’ performance if an industry’s firms are more commonly owned by the same set of investors. The authors are able to show this by exploiting a quasi-exogenous variation in common ownership from a mutual fund trading scandal to support a causal interpretation.
Best Poster Award
The best poster award goes to “Gulag-mart: Gray and Black Markets Within Modern Russian Penal System” by Anton V. Tabakh (Higher School of Economics, Mosow) and Polina V. Kryuchkova (Higher School of Economics, Moscow).
Russia’s FSIN (Federal Correctional Service) - direct successor of notorious GULAG - is one of the biggest prison systems in the world, with about 1000 penal institutions. While exchange of goods between inmates is prohibited, there is a flourishing market for goods and services with counterparties inside and outside penitentiaries. The authors find that (1) prices of goods and services can significantly deviate within closed system than at outside market, in both legal and semi-legal trading (2) lack of formal property rights significantly distorts behavior of economic agents and (3) opportunistic behavior of prison staff shapes market structure and outcomes.