Shareholder and management features in the context of behavioral characteristics, effects and life cycle

Abstract

Prerequisites of agent’s limited rationality are defined, when their choice is influenced by preferences, last events, emotional characteristics. An impact of behavioral characteristics on making decision in case of limited rationality of the agent is considered. For example, overconfidence managers encourage an increase in debt in capital structure of the company and overinvestment. The conflicts of interests for the Russian companies with ownership concentration are analyzed. Moreover ownership concentration – is a necessary measure of shareholders protection, not always have a negative effect on financial economic results. Behavioral features and agency problems vary at life cycles of the company. The algorithm of transition from one life stage to another in accordance with determined risks, agency problems and drivers is developed. The challenge to stimulate managers for increase of productivity and their decisions is determined. This article presents investigation a motivation and an encouragement of management; defined behavioral characteristics in the way of incentives; behavioral stereotypes in stimulation methods are presented.