A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.

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Topic

Algorithms, correcting biases

Resource type
Authors/contributors
Title
Algorithms, correcting biases
Abstract
Can algorithms assist firms in their decisions on nominating corporate directors? Directors predicted by algorithms to perform poorly indeed do perform poorly compared to a realistic pool of candidates in out-of-sample tests. Predictably bad directors are more likely to be male, accumulate more directorships, and have larger networks than the directors the algorithm would recommend in their place. Companies with weaker governance structures are more likely to nominate them. Our results suggest that machine learning holds promise for understanding the process by which governance structures are chosen and has potential to help real-world firms improve their governance.
Publication
Review of Financial Studies
Volume
34
Issue
7
Pages
3226-3264
Date
2021
Citation
Erel, I., Stern, L. H., Tan, C., & Weisbach, M. S. (2021). Algorithms, correcting biases. Review of Financial Studies, 34, 3226–3264.
Topic
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