Informational Benefits of Managerial Myopia
8 Pages Posted: 16 Sep 2019
Date Written: September 7, 2019
We show that managerial myopia has an informational benefit that has been overlooked in the prior research. A moderately myopic manager incentivizes the advocate of a risky project to produce full information about the project, leading to fully informed decision making and highest firm value.
Keywords: Bayesian persuasion, managerial objectives, signal informativeness, firm value
JEL Classification: C72, D83, G32
Suggested Citation: Suggested Citation