University of Chicago Law School Chicago Unbound Coase-Sandor Working Paper Series in Law and Coase-Sandor Institute for Law and Economics Economics 2004 Corporate Heroin: A Defense of Perks James C. Spindler M. Todd Henderson Follow this and additional works at: https://chicagounbound.uchicago.edu/law_and_economics Part of the Law Commons Recommended Citation James C. Spindler & M. Todd Henderson, "Corporate Heroin: A Defense of Perks" (John M. Olin Program in Law and Economics Working Paper No. 221, 2004). This Working Paper is brought to you for free and open access by the Coase-Sandor Institute for Law and Economics at Chicago Unbound. It has been accepted for inclusion in Coase-Sandor Working Paper Series in Law and Economics by an authorized administrator of Chicago Unbound. For more information, please contact
[email protected]. CHICAGO JOHN M. OLIN LAW & ECONOMICS WORKING PAPER NO. 221 (2D SERIES) Corporate Heroin: A Defense of Perks, Executive Loans, and Conspicuous Consumption M. Todd Henderson and James C. Spindler THE LAW SCHOOL THE UNIVERSITY OF CHICAGO September 2004 This paper can be downloaded without charge at: The Chicago Working Paper Series Index: http://www.law.uchicago.edu/Lawecon/index.html and at the Social Science Research Network Electronic Paper Collection: http://ssrn.com/abstract_id=597661 Corporate Heroin: † A Defense of Perks, Executive Loans, and Conspicuous Consumption M. Todd Henderson and James C. Spindler* Abstract: We argue that firms undertake to reduce employee savings in order to avoid final period problems that occur when employees accumulate enough wealth to retire and leave the industry. Normally, reputation constrains employee behavior, since an employee who “cheats” at one firm will then find herself unable to get a job at another.