The Effects of Incentives and Organizational Structure Jonathan M. Karpoff Independent Institute Working Paper Number 23 June 2000 100 Swan Way, Oakland, CA 94621-1428 • 510-632-1366 • Fax: 510-568-6040 • Email:
[email protected] • http://www.independent.org Public Versus Private Initiative in Arctic Exploration: The Effects of Incentives and Organizational Structure Jonathan M. Karpoff Norman J. Metcalfe Professor of Finance School of Business University of Washington Seattle, WA 98195 206-685-4954
[email protected] First draft: January 6, 1999 Third revision: January 24, 2000 I thank Peter Conroy for research assistance, and Helen Adams, George Benston, Mike Buesseler, Harry DeAngelo, Linda DeAngelo, Wayne Ferson, Alan Hess, Charles Laird, Paul Malatesta, John Matsusaka, Dave Mayers, Harold Mulherin, Jeff Netter, Jeff Pontiff, Russell Potter, Ed Rice, Sherwin Rosen, Sunil Wahal, Ralph Walkling, Mark White, an anonymous referee, and participants at seminars at the 1999 Arizona Finance Conference, the University of Alabama, University of British Columbia, Emory University, University of Georgia, University of Southern California, Texas A&M University, and the University of Washington for helpful comments. Public Versus Private Initiative in Arctic Exploration: The Effects of Incentives and Organizational Structure Abstract From 1818 to 1909, 35 government and 57 privately-funded expeditions sought to locate and navigate a Northwest Passage, discover the North Pole, and make other significant discoveries in arctic regions. Most major arctic discoveries were made by private expeditions. Most tragedies were publicly funded. By other measures as well, publicly-funded expeditions performed poorly. On average, 5.9 (8.9%) of their crew members died per outing, compared to 0.9 (6.0%) for private expeditions.