Now you know

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Many of us suspected as much, but here the University of Chicago
[not Chico] lets us in on the secrets of corporate behavior:

Agrawal, Anup, Jeffrey F. Jaffe, And Jonathan M. Karpoff. 1999.
"Management Turnover and Corporate Governance Changes following
the Revelation of Fraud." Journal of Law and Economics, 32: 1
(Part 2) (April): pp. 309-42.
 315: "Even when top managers have direct knowledge about the
fraudulent activities, they may be pursuing projects that,
prospectively at least, have positive net present value.  That
is, managers can commit frauds as part a value-increasing
strategy.  As Richard Posner suggests, incumbent managers'
comparative advantage may derive in part from their willingness
to commit or tolerate fraudulent activities." Posner, Richard A.
1986. Economic Analysis of Law (Boston: Little, Brown, & Co.).

Justin, is this really what Posner said?
--

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx