Featured Work
Jun 5, 2025
Andrey Malenko, Nadya Malenko | Working Paper No. 00158-00
Voting Choice
Traditionally, fund managers cast votes on behalf of fund investors. Recently, there is a shift towards "pass-through voting," with fund managers offering their investors a choice: delegate their votes to the fund or vote themselves. We develop a theory of delegation of voting rights to study the implications of such voting choice. If investors have heterogeneous preferences, voting choice may decrease investor welfare because investors...
Aug 25, 2018
Ali Kakhbod, Uliana Loginova, Andrey Malenko, Nadya Malenko | Working Paper No. 00155-00
Advising the Management: A Theory of Shareholder Engagement
We study the effectiveness of shareholder engagement, that is, shareholders communicating their views to management. When shareholders and management have different beliefs, each shareholder engages more effectively when other shareholders engage as well. A limited shareholder base can thus prevent effective engagement. However, a limited shareholder base naturally arises under heterogeneous beliefs because investors who most disagree with management do not become shareholders. Passive funds,...
Dec 13, 2016
Andrey Malenko | Working Paper No. 00005-00
Proxy Advisory Firms: The Economics of Selling Information to Voters
Proxy advisors play an important role by providing investors with research and recommendations on how to vote their shares. This paper examines how proxy advisors affect the quality of corporate decision-making. We analyze a model in which a monopolistic advisor offers to sell information to shareholders, who decide whether to acquire private information and/or buy the advisor's recommendation, and how to cast their votes. We...
Dec 13, 2016
Andrey Malenko | Working Paper No. 00004-00
Selling to Advised Buyers
In many cases, buyers are not fully informed about their valuations and rely on the advice of biased experts. For example, the board of the bidder relies on the advice of managers when bidding for a target in a takeover contest. We study the design of sale mechanisms to such "advised buyers". In static mechanisms, such as first- and second-price auctions, advisors communicate a coarsening...
Apr 3, 2016
Andrey Malenko, Nadya Malenko | Working Paper No. 00156-00
Proxy Advisory Firms: The Economics of Selling Information to Voters
We analyze how proxy advisors, which sell voting recommendations to shareholders, affect corporate decision-making. If the quality of the advisor's information is low, there is overreliance on its recommendations and insufficient private information production. In contrast, if the advisor's information is precise, it may be underused because the advisor rations its recommendations to maximize profits. Overall, the advisor's presence leads to more informative voting only...
