Michael C. Jensen
Jesse Isidor Straus Professor of Business Administration, Emeritus

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Publications

Click here to go to my SSRN Author Page where almost all my papers are available for download.

Published Articles

Books

Symposia

Speeches

Comments and Other Articles

Teaching Cases

Unpublished Papers

Published Articles

Michael C. Jensen and Joseph Fuller,  'What's a Director to Do?,' Harvard NOM Research Paper No. 02-38 (October 2002).  Forthcoming in Best Practices: Ideas and Insights from the World's Foremost Business Thinkers, (Cambridge, MA: Perseus Publishing and London, Bloomsbury Publishing, 2002). 

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Michael C. Jensen and Joseph Fuller,  'Just Say No to Wall Street: Courageous CEOs are putting a stop to the earnings game and we will all be better off for It,' in the Journal of Applied Corporate Finance, (Winter 2002), Vol. 14, No. 4, pp 41-46.  Excerpts of this article were published in the Wall Street Journal, 'Manager's Journal' column under the title, 'Dare To Keep Your Stock Price Low,' December 31, 2001, and in the Financial Times, under the title 'End the Myth-Making and Return to True Analysis,' Jan 22, 2002.

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Michael C. Jensen, 'Paying People to Lie: The Truth About the Budgeting Process,' Harvard NOM Research Paper No. 01-01, and HBS Working Paper No. 01-072 (April 2001). An executive summary of this paper entitled 'Corporate Budgeting Is Broken, Let's Fix It' was published in the Harvard Business Review, Nov., 2001.

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Michael C. Jensen, 'Value Maximization and the Corporate Objective Function,' in Unfolding Stakeholder Thinking, edited by Joerg Andriof, Sandra Waddock, Sandra Rahman and Bryan Husted, (Greenleaf Publishing, 2002). Earlier versions of this paper appeared in the Journal of Applied Corporate Finance, Fall 2001; Business Ethics Quarterly, Vol. 12, No.1, Jan 2002; the European Financial Management Review, 2001; and Breaking the Code of Change, Michael Beer and Nithan Norhia, eds, (Harvard Business School Press, 2000).  It was also presented at WP EFMA Athens 2000, and was published as Harvard NOM Research Paper No. 00-04 and Harvard Business School Working Paper No. 00-058.

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Michael C. Jensen, George P. Baker, Carliss Y. Baldwin, and Karen H. Wruck, 'Organizations and Markets at Harvard Business School, 1984-1996,' in The Intellectual Venture Capitalist: John H. McArthur and the Work of the Harvard Business School, 1980-1995, Thomas K. McCraw and Jeffrey L. Cruikshank, Eds., (Harvard Business School Press, 1998).

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Jensen, Michael C. and William H. Meckling, 'Divisional Performance Measurement,' in Michael C. Jensen, Foundations of Organizational Strategy. (Harvard University Press, 1998), pp. 345-361.

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Michael C. Jensen with Donald H. Chew, 'U.S. Corporate Governance: Lessons from the 1980s,' in The Portable MBA in Finance and Accounting, John Leslie Livingstone, Ed., (John Wiley & Sons, 1995), pp. 337-404. Abridged version published in Theory of the Firm: Governance, Residual Claims, and Organizational Forms, (Harvard University Press, 2000).

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Karen Hopper Wruck and Michael C. Jensen, 'Science, Specific Knowledge, and Total Quality Management,' Journal of Accounting and Economics (1994) pp. 247-287. Reprinted in Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998).

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Michael C. Jensen and William H. Meckling, 'The Nature of Man,' The Journal of Applied Corporate Finance (Summer 1994), pp. 4-19. Reprinted in Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998).

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Michael C. Jensen, 'Self Interest, Altruism, Incentives, and Agency Theory,' The Journal of Applied Corporate Finance (Summer 1994), pp. 40-45. Reprinted in Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998).

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Michael C. Jensen, 'The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems,' The Journal of Finance, (July, 1993). Reprinted in the Journal of Applied Corporate Finance, (Winter 1994) Vol. 6, No. 4, and in Finanzmarkt und Portfolio Management, (January 1993), Vol 7, No. 3. Reprinted in Theory of the Firm: Governance, Residual Claims, and Organizational Forms, (Harvard University Press, 2000). 

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Michael C. Jensen and William H. Meckling, 'Specific and General Knowledge, and Organizational Structure,' in Contract Economics, Lars Werin and Hans Wijkander, eds., (Blackwell, Oxford 1992), pp. 251-274. Reprinted in Journal of Applied Corporate Finance, (Fall 1995) and Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998).

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Michael C. Jensen, 'Corporate Control and the Politics of Finance,' Journal of Applied Corporate Finance (Summer, 1991), pp. 13-33. 

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Michael C. Jensen and Kevin J. Murphy, 'CEO Incentives: Its Not How Much You Pay, But How,' Harvard Business Review (May/June, 1990), pp. 138-153.

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Michael C. Jensen and Kevin J. Murphy, 'Performance Pay and Top Management Incentives,' Journal of Political Economy (April, 1990), pp. 225-265. Reprinted in Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998). Related work: Michael C. Jensen and Kevin J. Murphy, 'A New Survey of Executive Compensation,' Full Survey and Technical Appendix to 'CEO Incentives-It's Not How Much You Pay But How,' Harvard Business Review (May/June 1990)

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Michael C. Jensen, 'Eclipse of the Public Corporation,' Harvard Business Review (September-October, 1989). Reprinted in The Law of Mergers, Acquisitions, and Reorganizations, Dale A. Oesterle, ed. (West Publishing, 1991).

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Michael C. Jensen, 'Active Investors, LBOs, and the Privatization of Bankruptcy,' Journal of Applied Corporate Finance, Vol. 2, No. 1 (Spring 1989), pp. 35-44. Reprinted in Theory of the Firm: Governance, Residual Claims, and Organizational Forms, (Harvard University Press, 2000).

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Michael C. Jensen, Steven Kaplan, Laura Stiglin, 'Effects of LBOs on Tax Revenues of the U.S. Treasury,' Tax Notes, Vol. 42, No. 6 (February 6, 1989), pp. 727-733. Reprinted in The Law of Mergers, Acquisitions, and Reorganizations, Dale A. Oesterle, ed. (West Publishing 1991)..

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George P. Baker, Michael C. Jensen and Kevin J. Murphy, 'Compensation and Incentives: Practice vs. Theory,' Journal of Finance (July, 1988). Reprinted in Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998).

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Michael C. Jensen and Jerold B. Warner, 'The Distribution of Power Among Corporate Managers, Shareholders, and Directors,' Journal of Financial Economics (February 1988). Reprinted in Theory of the Firm: Governance, Residual Claims, and Organizational Forms, (Harvard University Press, 2000).

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Michael C. Jensen, 'Takeovers: Their Causes and Consequences,' Journal of Economic Perspectives, Vol. 2, No. 1 (Winter, 1988). Reprinted in Readings in Mergers and Acquisitions, Patrick A. Gaughan, ed., (Basil Blackwell, 1993). 

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Michael C. Jensen,'The Free Cash Flow Theory of Takeovers: A Financial Perspective on Mergers and Acquisitions and the Economy,' in The Merger Boom, Federal Reserve Bank of Boston, Vol. 31 (January 1988).

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Michael C. Jensen, 'The Takeover Controversy: Analysis and Evidence,' The Midland Corporate Finance Journal (Summer, 1986), also appears in Knights, Raiders and Targets: The Impact of the Hostile Takeover, John Coffee, Louis Lowenstein, and Susan Rose-Ackerman, editors (Oxford University Press, 1988), and Joel M. Stern, G. Bennett Stewart III, and Donald H. Chew, eds., Corporate Restructuring & Executive Compensation (Ballinger Publishing, Cambridge, MA, 1989), pp. 3-43. 

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Michael C. Jensen, William H. Meckling and Clifford G. Holderness, 'Analysis of Alternative Standing Doctrines,' International Review of Law and Economics (December, 1986).

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Michael C. Jensen, 'The Agency Costs of Free Cash Flow: Corporate Finance and Takeovers,' American Economic Review, Vol. 76, No. 2 (May, 1986), also appears in Management Buy-Outs, Mike Wright editor, part of the International Library of Management, series editor Keith Bradley (Dartmouth Publishing, England and Vermont 1994), pp. 3-9. Reprinted in abridged form as 'Agency Costs of Free Cash Flow and Takeovers,' in Simon Management Review, (Winter, 1986).

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Michael C. Jensen, 'Takeovers: The Controversy and the Evidence,' Proceedings of the William G. Karnes Symposium on Mergers and Acquisitions (Bureau of Economic and Business Research, University of Illinois, 1986).

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Michael C. Jensen, 'When Unocal Won Over Pickins, Shareholders and Society Lost,' Financier 9, November 1985, pp. 50-52.

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Michael C. Jensen and Clifford W. Smith, Jr., 'Stockholder, Manager, and Creditor Interests: Applications of Agency Theory,' Recent Advances in Corporate Finance, E. Altman and M. Subrahmanyam, Editors (Dow-Jones Irwin, 1985). Reprinted in Theory of the Firm: Governance, Residual Claims, and Organizational Forms, (Harvard University Press, 2000).

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Eugene F. Fama and Michael C. Jensen, 'Organizational Forms and Investment Decisions,' Journal of Financial Economics, Vol. 14, No. 1 (March, 1985). Reprinted in Theory of the Firm: Governance, Residual Claims, and Organizational Forms, (Harvard University Press, 2000).

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Michael C. Jensen, 'Takeovers: Folklore and Science,' Harvard Business Review (November-December, 1984). Earlier versions of this paper entitled 'Corporate Control: Folklore vs. Science,' were published in the Graduate School of Management, University of Rochester Management Journal, Vol. 2, No. 2 (Autumn, 1983) and as International Institute for Economic Research Reprint Paper 19 (June, 1984).

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Michael C. Jensen and Clifford W. Smith, 'The Theory of Corporate Finance: A Historical Overview,' in ed. Michael C. Jensen and Clifford W. Smith, The Modern Theory of Corporate Finance, (McGraw-Hill, 1984), pp. 2-20.

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Eugene F. Fama and Michael C. Jensen, 'Agency Problems and Residual Claims,' Journal of Law and Economics, Vol. 26, No. 2 (June, 1983). Reprinted in Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998).

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Eugene F. Fama and Michael C. Jensen, 'Separation of Ownership and Control,' Journal of Law and Economics, Vol. 26, No. 2 (June, 1983) reprinted in Management of Non-Profit Organizations, Sharon M. Oster, Editor (Dartmouth Publishing Co., 1994) and Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998).

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Michael C. Jensen and Richard S. Ruback, 'The Market for Corporate Control: The Scientific Evidence,' Journal of Financial Economics, Vol. 11, Nos. 1-4 (April, 1983).

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Michael C. Jensen and William H. Meckling, 'Corporate Governance and Economic Democracy: An Attack on Freedom,' in Corporate Governance: A Definite Exploration of the Issues, C. J. Huizenga, Editor (1983).

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Michael C. Jensen, 'Organization Theory and Methodology,' The Accounting Review, Vol. LVII, No. 2 (April, 1983). Reprinted in Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998).

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William H. Meckling and Michael C. Jensen, 'Reflections on the Corporation as a Social Invention,'in Controlling the Giant Corporation: A Symposium (Center for Research in Government Policy and Business, Graduate School of Management, University of Rochester, 1982). Reprinted in the Midland Corporate Finance Journal, Vol. 1, No. 3 (Autumn, 1983); reprinted in International Institute for Economic Research Reprint Paper 18 (November, 1983).

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Michael C. Jensen, 'Toward a Theory of the Press,' in Economics and Social Institutions, Karl Brunner, Editor (Martinus Nijhoff Publishing Company, 1979).

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Michael C. Jensen and William H. Meckling, 'Rights and Production Functions: An Application to Labor Managed Firms and Codetermination,' Journal of Business, Vol. 52, No. 4 (October, 1979). Reprinted in Theory of the Firm: Governance, Residual Claims, and Organizational Forms, (Harvard University Press, 2000).

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Michael C. Jensen, 'Some Anomalous Evidence Regarding Market Efficiency,' Journal of Financial Economics, Vol. 6, Nos. 2/3 (1978).

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Michael C. Jensen and William H. Meckling, 'Can the Corporation Survive?,' reprinted by Rockwell International (January, 1978); the Financial Analysts Journal (January/February, 1978); The Company Corporation Newsletter, Vol. 4, Nos. 2, 3, 4, 5 (1977/1978); International Institute for Economic Research Reprint Paper 6 (July, 1977); ERC Transcript Reprint Series, No. 5 (May, 1977); Iowa Life Underwriters' Life Lines (March, 1977); American Institute's Economic Education Bulletin, Vol. XVII, No. 3 (March, 1977); MBA Magazine (March, 1977); Bethel Home News (January-February, 1977); Black & Decker, 1976 Annual Report, Supplement (1976); Castle & Cooke, Inc. (1976).

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Michael C. Jensen and William H. Meckling, 'Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure,' Journal of Financial Economics, Vol. 3, No. 4 (1976). (Excerpted in Issues in Accountability, No. 6 (March, 1981), and Economics of Corporation Law and Securities Regulation, Richard A. Posner and Kenneth E. Scott, Editors, Little Brown & Company (1980). Reprinted in The Modern Theory of Corporate Finance, Michael C. Jensen and Clifford W. Smith, Jr., Editors, McGraw-Hill Publishing Company (1984); Michael C. Jensen, Foundations of Organizational Strategy, (Harvard University Press, 1998); and Theory of the Firm: Governance, Residual Claims, and Organizational Forms, (Harvard University Press, 2000).

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Michael C. Jensen, 'Reflections on the State of Accounting Research and the Regulation of Accounting,' Stanford Lectures in Accounting (Graduate School of Business, Stanford University, Palo Alto, California (1976)).

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Michael C. Jensen, 'Tests of Capital Market Theory and Implications of the Evidence,' in Is Financial Analysis Useless? Proceedings of a Seminar on the Efficient Market and Random Walk Hypotheses (The Financial Analysts Research Foundation, 1975). Reprinted in Handbook of Financial Economics, J. L. Bicksler, Editor (North-Holland Publishing Company, 1979).

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Michael C. Jensen, 'Optimal Utilization of Market Forecasts and the Evaluation of Portfolio Performance,' in Mathematical Methods in Finance, G. P. Szego and Karl Shell, Editors (North-Holland Publishing Company, 1972).

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Michael C. Jensen, 'Capital Markets: Theory and Evidence,' Bell Journal of Economics and Management Science, Vol. 3, No. 2 (Autumn, 1972).

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Martin J. Bailey and Michael C. Jensen, 'Risk and the Discount Rate for Public Investment' in Studies in the Theory of Capital Markets, M. C. Jensen, Editor (Praeger Publishers, 1972).

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Fischer Black, Michael C. Jensen, and Myron Scholes, 'The Capital Asset Pricing Model: Some Empirical Tests,' in Studies in the Theory of Capital Markets, M. C. Jensen, Editor (Praeger Publishers, 1972). abstract

Michael C. Jensen, 'The Foundation and Current State of Capital Market Theory,' in Studies in the Theory of Capital Markets, M. C. Jensen, Editor (Praeger Publishers, 1972).

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Michael C. Jensen and John B. Long, Jr., 'Corporate Investment Under Uncertainty and Pareto Optimality in the Capital Markets,' Bell Journal of Economics and Management Science, Vol. 3, No. 3 (Spring, 1972).

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Michael C. Jensen and George A. Benington, 'Random Walks and Technical Theories: Some Additional Evidence,' Journal of Finance (May, 1970). Reprinted in Security Evaluation and Portfolio Analysis, E. Elton and M. Gruber, Editors (Prentice-Hall,1972), and Investment Management: Some Readings, J. Lorie and R. Brealey, Editors (Praeger Publishers, 1972).

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Michael C. Jensen, 'Risk, the Pricing of Capital Assets, and the Evaluation of Investment Portfolios,' Journal of Business, Vol. 42 (April, 1969). Reprinted in Frontiers of Investment Analysis, E. Bruce Fredrikson, Editor (International Textbook Company, 1971). abstract

Eugene F. Fama, Lawrence Fisher, Michael C. Jensen and Richard Roll, 'The Adjustment of Stock Prices to New Information,' International Economic Review, Vol. 10 (February, 1969). Reprinted in Investment Management: Some Readings, J. Lorie and R. Brealey, Editors (Praeger Publishers, 1972), and Strategic Issues in Finance, Keith Wand, Editor, (Butterworth Heinemann, 1993).

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Michael C. Jensen, 'The Performance of Mutual Funds in the Period 1945-1964,' Journal of Finance (May, 1968). Reprinted in Investment Management: Some Readings, J. Lorie and R. Brealey, Editors (Praeger Publishers, 1972).

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Books

Theory of the Firm: Governance, Residual Claims, and Organizational Forms, Michael C. Jensen (Harvard University Press, December 2000). abstract

Foundations of Organizational Strategy, Michael C. Jensen (Harvard University Press, October 1998). abstract

The Modern Theory of Corporate Finance, Michael C. Jensen and Clifford W. Smith, Jr., Editors (McGraw-Hill Publishing Company, 1984). abstract

Democracy in Crisis, Michael C. Jensen and William H. Meckling (unpublished manuscript, 1977). abstract

Studies in the Theory of Capital Markets, Michael C. Jensen, Editor (Praeger Publishers, 1972). abstract

 

Symposia

Michael C. Jensen and Richard S. Ruback, eds., 'The Structure and Governance of Enterprise,' Journal of Financial Economics, Vol. 27, Nos. 1-2 (October, 1990). abstract

Michael C. Jensen and Jerold Warner, eds., 'The Distribution of Power Among Corporate Managers, Shareholders And Directors,' Journal of Financial Economics, Vol. 20, Nos. 1-2 (Jan.-March, 1988). abstract

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Michael C. Jensen and Clifford W. Smith, Jr., eds., 'Investment Banking and the Capital Acquisition Process,' Journal of Financial Economics, Vol. 15, Nos. 1-2 (January/February, 1986). abstract

Michael C. Jensen and Jerold L. Zimmerman, eds., 'Management Compensation and the Managerial Labor Market,' Journal of Accounting and Economics, Vol. 7, Nos. 1-3 (April, 1985), pp. 1-257. abstract

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Michael C. Jensen, ed., 'The Market for Corporate Control: The Scientific Evidence,' Journal of Financial Economics, Vol. 11, Nos. 1-4 (April, 1983), pp. 1-475. abstract

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Michael C. Jensen, ed., 'Some Anomalous Evidence Regarding Market Efficiency,' Journal of Financial Economics, Vol. 6, Nos. 2-3 (June/September, 1978), pp. 93-330. abstract

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Comments and Other Articles

Michael C. Jensen and Perry Fagan, 'Capitalism Isn't Broken,' Wall Street Journal, (March 29, 1996), p. A10.

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Michael C. Jensen, 'A Revolution Only Markets Could Love,' Wall Street Journal, (January 3, 1994), p. A6.

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Michael C. Jensen, 'The Market for Corporate Control,' in New Palgrave Dictionary of Money and Finance, (London, 1992).  abstract

Michael C. Jensen, 'The Pros and Cons of Restructuring,' in 'Restructuring America Forum,' Institutional Investor, (June, 1989), p. 8. abstract

Michael C. Jensen, 'LBOs and the Reemergence of Institutional Monitoring of Managers,' Leveraged Management Buyouts: Causes and Consequences, Yakov Amihud, ed. (Dow Jones Irwin, Homewood, IL, 1989), pp. 263-268. abstract

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Michael C. Jensen, 'Is Leverage an Invitation to Bankruptcy?,' Wall Street Journal, p. A 14, (February 1, 1989).

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Michael C. Jensen, 'Arbitrage, Information Theft, and Insider Trading,' New Palgrave Dictionary of Money and Finance, (London, 1992); an earlier version appeared as 'Arbitrage, Information Theft, and the Mistaken Attack on Insider Trading,' in Chief Financial Officer U.S.A., John Thackay, ed. (Sterling Publications, London: 1988), pp. 114-115.

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Michael C. Jensen, 'The Takeover Controversy,' Executive Speeches, Vol. 2, No. 10 (May, 1988).

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Michael C. Jensen, 'Characteristics of Hostile and Friendly Takeover Targets: Comment,' Proceedings of Conference on Corporate Takeovers: Causes and Consequences, Alan Auerbach, ed., (University of Chicago Press, May 1988).

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Michael C. Jensen,'A Helping Hand for Entrenched Managers,' Wall Street Journal (November 4, 1987).

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Michael C. Jensen, 'The Takeover Controversy, the Restructuring of Corporate America,' reprinted in From the Podium, Beta Gamma Sigma, (September 1987).

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Michael C. Jensen, 'Don't Freeze the Arbs Out,' Wall Street Journal, p. 22 (December 3, 1986).

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Michael C. Jensen, 'The Takeover Controversy: Shareholders vs. Managers,' Cato Policy Report, Vol. VIII, No. 3 (May/June, 1986). abstract

Michael C. Jensen, 'How to Detect a Prime Takeover Target,' New York Times, (March 9, 1986). abstract

Michael C. Jensen, 'When Unocal Won Over Pickens, Shareholders and Society Lost,' Financier (November, 1985), pp. 50-52. Reprinted in The Rochester Management Review (Fall, 1986).

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Michael C. Jensen, 'Mergers Benefiting Oil Patch,' Dallas Morning News, (September 3, 1985). abstract

Michael C. Jensen, 'The Efficiency of Takeovers,' The Corporate Board, (September/October 1985), pp. 16-22.

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Michael C. Jensen and Jerold L. Zimmerman, 'Management Compensation and the Managerial Labor Market,' Journal of Accounting and Economics, Vol. 7, Nos. 1-3 (April, 1985).

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Michael C. Jensen and Kevin J. Murphy, 'Beware the Self-Serving Critics,' New York Times (May 20, 1984).

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Michael C. Jensen, 'Capital Structure Change and Decreases in Stockholders' Wealth: Comment,' National Bureau of Economic Research Proceedings of Conference on Corporate Capital Structures in the United States (University of Chicago Press, 1984). abstract

Michael C. Jensen, 'Discussion of Corporate Financial Reporting: A Methodological Review of Empirical Research: Comment,' Journal of Accounting Research, Supplement to Vol. 20 (1982).

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