{'fraction_non_alphanumeric': 0.012269938650306749, 'fraction_numerical': 0.0, 'mean_word_length': 4.969512195121951, 'pattern_counts': {'":': 0, '<': 0, '<?xml version=': 0, '>': 0, 'https://': 0, 'lorem ipsum': 0, 'www.': 0, 'xml': 0}, 'pii_count': 0, 'substrings_counts': 0, 'word_list_counts': {'cursed_substrings.json': 0, 'profanity_word_list.json': 0, 'sexual_word_list.json': 0, 'zh_pornsignals.json': 0}}
Stock Options and Employees' Firm-Specific Human Capital Under the Threat of Divesture and Aquisition

This paper considers whether or not the first-best level of firm-specific human capital investment is attained by the use of stock option plans for workers and the choice of the method of payment for acquisitions even though workers are threatened with the possibility of a divestiture and acquisition. We show that the first-best level of firm-specific human capital investment is achieved by a stock option plan with a positive exercise price for workers conditional on the event of a divestiture and acquisition. We also suggest that, under certain conditions, a stock offer in the acquisition can resolve a collusion problem in which the target firm may collude with workers and attempt to raise the acquisition tender price up to the level that is consistent with the first-best level of investment even though workers actually choose an inefficient level of investment.