Motivating innovation is an important concern in many incentive problems. For example, shareholders of large corporations often need to motivate managers to pursue more innovative business strategies. This paper shows that the optimal incentive scheme that motivates innovation exhibits substantial tolerance (or even reward) for early failure and reward for long-term success. Moreover, commitmen...

One of the ways to model contraction functions for belief sets is epistemic entrenchment. The first step was provided by Gärdenfors in [5], who defined epistemic entrenchment and a contraction function in terms of it and related the latter with the AGM contraction function. Later Hans Rott in [16] presented an entrenchment based contraction function that does not satisfy recovery. In this paper...

Prior studies on family business, have found both positive as well as negative affects of altruism and entrenchment on firm performance. Drawing on theoretical underpinnings of resource based view, stewardship theory, and agency theory; we explain how ‘family involvement’ acts as a moderator in contingently explaining positive and negative effects of altruism and entrenchment on family firm per...

The AGM framework is the benchmark approach in belief change. Since the framework assumes an underlying logic containing classical Propositional Logic, it can not be applied to systems with a logic weaker than Propositional Logic. To remedy this limitation, several researchers have studied AGM-style contraction and revision under the Horn fragment of Propositional Logic (i.e., Horn logic). In t...

This study aims to empirically assess the conditional effect of managerial ownership on firm value moderating role independent board. Using a sample Indonesian listed firms from 2015-2020 and panel data 2,627, we used PROCESS V3.4. for SPSS estimate research models. Research findings; there is non-linear relationship between value, in line with entrenchment hypothesis. Furthermore, findings thi...

Classic entrenchment-based contraction is not applicable to many useful logics, such as description logics. This is because the semantic construction refers to arbitrary disjunctions of formulas, while many logics do not fully support disjunction. In this paper, we present a new entrenchment-based contraction which does not rely on any logical connectives except conjunction. This contraction is...

This paper examines firms’ corporate bond price reactions to bank loan covenant violations. Using an event study approach, we find that response is marginally negative in the 1990s and becomes significantly positive 2000s. The suggest bondholders benefit from violations more recent years. Specifically, enable banks step take necessary actions protect creditors’ interests, which not only private...

Within the AGM paradigm revision and contraction operators are constrained by a set of rationality postulates. The logical properties of a set of knowledge are not strong enough to uniquely determine a revision or contraction operation, therefore constructions for these operators rely on some form of underlying preference relation, such as a systems of spheres, or an epistemic entrenchment orde...

In the coherentist approach to belief change, all beliefs are assumed to be ordered according to their epistemic entrenchment. On the other hand, in the foundational approach to belief change, which explicitly distinguishes “basic” beliefs from “inferred” beliefs, basic beliefs are ordered according to their retractability. Both entrenchment and retractability are distinct tie-breaking mechanis...

I. AGM Belief Revision Theory 1) The Elements of Epistemological Theories: Ch. 1 of [4]. 2) Models of Epistemic States: Ch. 2.1 – 2.5 of [4]. 3) Expansions, Revisions, and Contractions I: Ch. 3.1 – 3.4 of [4]. 4) Expansions, Revisions, and Contractions II: Ch. 3.5 – 3.7 of [4]. 5) Epistemic Entrenchment and Construction of Contraction Functions I: Ch. 4.1 – 4.4. of [4]. 6) Epistemic Entrenchmen...