Riccardo Calcagno

Riccardo Calcagno
Politecnico di Torino | polito · DIGEP - Department of Management and Production Engineering

PhD in Economics, University of Louvain (LLN, B)

About

47
Publications
3,479
Reads
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341
Citations
Introduction
Current research interests: 1. Household Finance: Financial Literacy, Financial Advice, Financial Decision Making under Stress 2. Corporate Finance: Managerial Compensation, M&As
Additional affiliations
January 2011 - March 2020
emlyon business school
Position
  • Professor (Full)
October 2005 - December 2010
Vrije Universiteit Amsterdam
Position
  • Professor (Associate)
September 1999 - September 2005
Tilburg University
Position
  • Professor (Assistant)

Publications

Publications (47)
Article
We study the relations between takeover negotiations duration, competition and learning, focusing on the private phase of bidder-initiated transactions. While the negotiation goes on, both parties learn about true deal synergies. At any moment, rival bidders can show up and compete for the target. Using a discrete-time finite-horizon dynamic progra...
Article
Full-text available
We study the role of stock market characteristics on managerial compensation. A risk averse manager exerts an unobservable effort that drives future firm value. The value cannot be used in the incentive contract because it realizes in the distant future and compensating the manager cannot be postponed until then. The stock price emerges endogenousl...
Preprint
Using a representative survey of Dutch entrepreneurs and self-employed we measure their subjective financial knowledge, whether they ask for advice when managing their companies, and whether subjective financial knowledge and demand for advice are related to the firm economic outcomes. We find that respondents feel more comfortable when dealing wit...
Article
Using a survey of clients from one of the largest Italian banks, we find that investors with low level of trust in professional advisors seek financial counselling, but make their decisions autonomously. We investigate whether these investors exert some form of control over the recommendations they receive, and, if so, which one. Investors can push...
Article
Full-text available
Using a representative sample of Italian workers aged 55+, we survey their understanding of the recent (2011) pension reform and analyse their preference for earlier retirement and willingness to pay for exiting the workforce a year earlier. The preference for earlier retirement is particularly strong for women and for workers who were obliged by t...
Article
Using a survey of clients from one of the largest Italian banks, we investigate whether investors exert some form of control over the quality of the recommendations they receive, and, if so, which one. We fi…nd that investors with low levels of trust seek …financial counselling, but make their decisions autonomously. Within this subgroup of investo...
Article
This paper investigates the effect of potential competition on takeovers which we model as a bargaining game with alternating offers where calling an auction represents an outside option for each bidder at each stage of the game. The model describes a takeover process that is initiated by an unsolicited bidder, and it aims to answer three main ques...
Article
Full-text available
We study games endowed with a pre-play phase in which players prepare the actions that will be implemented at a predetermined deadline. In the preparation phase, each player stochastically receives opportunities to revise her actions, and the finally revised action is taken at the deadline. In two-player “common interest” games, where there exists...
Article
Full-text available
Using the Bank of Italy’s Survey of Households Income and Wealth (SHIW) covering a 5-years panel, we measure the impact of the degree of households’ financial literacy on the quota of housing investment in their portfolio. We find that households with higher levels of financial literacy hold a relatively lower share of illiquid wealth, and the resu...
Data
Using the Bank of Italy's Survey of Household Income and Wealth (SHIW) covering a 5-year panel, we measure the impact of the degree of households' financial literacy on their portfolio imbalance towards housing investment. We find that households with higher levels of financial literacy hold a relatively lower share of illiquid wealth, and the resu...
Article
The paper investigates the impact of competition on the outcome of takeover contests characterized by a) bidders with different attitudes toward the target, i.e. friendly versus hostile bidders; and b) different modes of completing the deal, namely through private negotiations, auctions or tender offers. This environment is modeled as a bargaining...
Article
The low level of financial literacy in many countries suggests that households are at risk of sub-optimal financial decisions. In this paper we assess to what extent financial advisors can substitute for the households' lack of financial knowledge, by analyzing the effect of investors' financial literacy on their decision about how much to rely on...
Article
We introduce a form of pre-play communication that we call "preopening" for standard normal form, two player games. During the preopening players announce their strategy using a communication system which is subject to stochastic failures. Players payoffs depend on the action profile posted on the system at the end of the preopening. We show that t...
Article
Full-text available
We introduce a form of pre-play communication that we call "preopening". During the preopening, players announce their tentative actions to be played in the underlying game. Announcements are made using a posting system which is subject to stochastic failures. Posted actions are publicly observable and players payoffs only depend on the opening out...
Article
We study the effect on savings of an increase in the capital risk of the investment opportunities when the representative consumer is allowed to optimally choose her portfolio. Sandmo (1970) and Levhari and Srinivasan (1969) prove that individuals with high risk-aversion and time-separable, power utility increase their optimal savings when capital...
Article
Full-text available
The paper analyses the effect of equity-price shocks on current account positions for the G-7 industrialized countries during 1974–2007. It uses a Bayesian vector autoregression with sign restrictions for the identification of equity-price shocks and to test empirically for their effect on current accounts. Such shocks are found to exert a sizable...
Article
Full-text available
We analyze the dynamics of takeover contests where hostile raiders compete against white knights involved by a lead blockholder of the target firm (the incumbent). We assume that the incumbent has the power to bargain with the potential bidders to set a minimum takeover price. We characterize the conditions under which a white knight wins the takeo...
Article
We analyze the dynamics of takeover contests where hostile raiders compete against white knights involved by a lead blockholder of the target firm (the incumbent). We assume that the incumbent has the power to bargain with the potential bidders to set a minimum takeover price. We characterize the conditions under which a white knight wins the takeo...
Article
Full-text available
We study the effects of the reform of the system of severance payments (TFR) of Italian employees on the cost and the access to credit for small and medium-size enterprises (SMEs). The most direct consequence of the reform is to reduce in the long run the amount of liquid assets available to Italian firms. We argue that this reform, implemented in...
Article
This paper explores the cost and benefit of linking CEO pay to the stock price of his firm by focusing explicitly on the trading of the company stock in the marketplace. On the one hand, markets are thought to be efficient aggregators of dispersed and imperfect information. On the other hand, trading in the stock market suffers from free-riding on...
Article
Full-text available
In this paper we study the effect on Italian households’ saving behaviour of a change in real estate wealth using the Bank of Italy’s Survey of Household Income and Wealth (SHIW) dataset. We relate annual household saving to capital gains in housing, controlling for other characteristics such as age. In line with the empirical predictions of our mo...
Article
This paper shows that there is a natural trade-off when designing market based executive compensation. The benefit of market based pay is that the stock price aggregates speculators’ dispersed information and therefore takes a picture of managerial performance before the long-term value of a firm materializes. The cost is that informed speculators’...
Article
We show that the relative seniority of debt and managerial compensation has important implications for the design of remuneration contracts. Whereas the traditional literature assumes that debt is senior to remuneration, there are in reality many cases in which remuneration contracts are de facto senior to debt claims in financially distressed firm...
Article
In this paper we study the effects of the reform of the system of severance indemnities (TFR) currently in use for Italian employees on the cost and the access to credit for Italian small and medium-size enterprises (SMEs). The most direct consequence of the reform will be to reduce the amount of liquid assets available to Italian firms. We argue t...
Article
This paper studies how a competitive stock market aggregates useful information for structuring CEO pay. We identify a dilemma of market based compensation. Whenever the stock price contains useful information for incentive contracting, it must also contain information that is useless for contracting. Speculators only trade on their private informa...
Article
Full-text available
This paper studies the effect of asymmetric information on the price formation process in a quotedrivenm arket.O ne market-makere ceives privatei nformationo n the value of the quoteda sset and repeatedly competes with market-makersw ho are uninformed.W e show that despite the fact that the informed market-maker'sq uotes are public, the marketi s n...
Article
We generalize a standard general equilibrium framework extended for moral hazard to allowfor a dispersed initial ownership distribution of firms.We show that the market allocation is constrained-efficient only when in each firm the entrepreneur who generates payoffs through unobservable effort has full initial ownership in his firm.
Article
Full-text available
This paper examines the role of trading and liquidity in a large competitive market with dispersed heterogenous information on market-based managerial compensation. The paper recognizes the endogenous nature of a firm’s stock price - it is the outcome of self-interested speculative trading motivated by imperfect information about future firm value....
Article
We introduce demand uncertainty in the model of Allaz-Vila (1993). Traders' risk attitude in the forward market crucially determines the degree of competitiveness of the spot market. The higher demand uncertainty the lower the competition-enhancing effect of forward trading.
Article
We show that the relative seniority of debt and managerial compensation has important implications on the design of remuneration contracts. Whereas the traditional literature assumes that debt is senior to remuneration, we show that this is frequently not the case according to bankruptcy regulation and as observed in practice. We theoretically show...
Article
Full-text available
The paper shows that when discussing to what extent managerial compensation should be based on market vs. accounting information (or both), it is important to consider market information, e.g. the stock price, as endogenous. Market participants have or collect information about a firm and anticipate the disclosure of future accounting information....
Article
In this paper we study the constrained efficiency of a stock market equilibrium under moral hazard. We extend a standard general equilbrium framework (Magill and Quinzii (1999) and (2002)) to allow for a more general initial ownership distribution. We show that the market allocation is constrained efficient only if in each firm the entrepreneur who...
Article
This paper examines the role of trading and market liquidity on market-based management compensation. The paper recognizes the endogenous nature of a firm's stock price - it is the outcome of trading motivated by anticipations of future firm value. Our central result is that the degree of market-based compensation is proportional to market liquidit...
Article
We consider the effect of asymmetric information on price formation process in a quote-driven market where one market maker receives a private signal on the security's fundamental. A model is presented where market makers repeatedly compete in prices: at each stage a bid-ask auction occurs and the winner trades the security against liquidity trader...
Article
Full-text available
We study the efficiency of the equilibrium price in a centralized, order-driven market where asymmetrically informed traders are active for several periods and can observe each other current and past orders, as in electronic systems of trading. We show that the more precise the information the higher the incentive to reveal it in the first trading...
Article
Pigovian taxation of externalities has limited appeal if the tortfeaser has insufficient resources to pay the damage when it occurs. To defend Pigovian taxation in the presence of judgement-proof agents, its proponents point at the many institutions extending liability to third parties. Yet little is known about the validity of Pigou's analysis in...
Article
Full-text available
We study the efficiency of the equilibrium price in a centralized, order-driven market where many asymmetrically informed traders are active for many periods. We show that asymmetries of information can lead to sub-optimal information revelation with respect to the symmetric case. In particular, we assess that the more precise the information the h...
Article
We study the efficiency of the equilibrium price in a centralized, order-driven market where many asymmetrically informed traders are active for many periods.
Article
Full-text available
We consider the effect of asymmetric information on price formation process in a financial market where private information is held by a market maker. A Bayesian game is proposed in which there is price competition between two market makers with two different information partitions. At each stage players set bid and ask prices simultaneously and th...
Article
We consider the effect of asymmetric information on price formation process in a financial market where private information is held by a market maker. A Byesian game is proposed in which there is price competition between two market makers with two different information partition.
Article
Full-text available
We extend the model of Allaz-Vila (1993) to a setting with uncertainty on the market demand. We study a model in which the forward market can be settled in cash, so that the market is open to risk-averse speculators. We show that the risk attitude of traders on the forward market plays a crucial rol e in determining the degree of competitiveness of...
Article
This paper analyzes how the monitoring activity by sell-side analysts who produce trading recommendations affects the managers' incentives to provide truthful information to the market. We show that the managers' communication strategy depends on the market prior belief on firm performance. A perfectly informed manager reveals a truthful (resp. uni...