School Consolidations and Teacher Incentive Contracts

Abstract An important task for organizations is establishing truthful communication between parties with differing interests. This task is made particularly challenging when the accuracy of the information is poorly observed or not at all. In these settings, incentive contracts based on the accuracy of information will not be very effective. This paper considers an alternative mechanism that does not require any signal of the accuracy of any information communicated to provide incentives for truthful communication. Rather, an expert sacrifices future participation in decision-making to influence the current period’s decision in favour of their preferred project. This mechanism captures a notion often described as ‘political capital’ whereby an individual is able to achieve their own preferred decision in the current period at the expense of being able to exert influence in future decisions (‘spending political capital’). When the first-best is not possible in this setting, I show that experts hold more influence than under the first-best and that, in a multi-agent extension, a finite team size is optimal. Together these results suggest that a small number of individuals hold excessive influence in organizations.

Download Full-text

Information Acquisition and Its Incentives in an E-Commerce Supply Chain under the Offline Showroom Model

Journal of theoretical and applied electronic commerce research ◽

10.3390/jtaer16050100 ◽

2021 ◽

Vol 16 (5) ◽

pp. 1791-1804

Author(s):

Mengli Li ◽

Xumei Zhang

Keyword(s):

Supply Chain ◽

Information Acquisition ◽

Incentive Contracts ◽

Demand Forecast ◽

Competition Intensity ◽

Demand Information ◽

Optimal Information ◽

Acquisition Strategy ◽

The One ◽

The Impact

Recently, the showroom model has developed fast for allowing consumers to evaluate a product offline and then buy it online. This paper aims at exploring the optimal information acquisition strategy and its incentive contracts in an e-commerce supply chain with two competing e-tailers and an offline showroom. Based on signaling game theory, we build a mathematical model by considering the impact of experience service and competition intensity on consumers’ demand. We find that, on the one hand, information acquisition promotes supply chain members to obtain demand information directly or indirectly, which leads to forecast revenue. On the other hand, information acquisition promotes supply chain members to distort optimal decisions, which results in signal cost. The optimal information acquisition strategy depends on the joint impact of forecast revenue, signal cost and demand forecast cost. Notably, in some conditions, the offline showroom will not acquire demand information even when its cost is equal to zero. We also design two different information acquisition incentive contracts to obtain Pareto improvement for all supply chain members.

Download Full-text