CHAPTER 16. NEVER UNDERESTIMATE THE POWER OF INCENTIVES

2019 ◽  
pp. 145-153
Keyword(s):  
Power Of Incentives

scholarly journals Paying for performance: the power of incentives over habits

2008 ◽  
Vol 17 (4) ◽  
pp. 449-451 ◽  
Author(s):  
Jody L. Sindelar
Keyword(s):  
Power Of Incentives

Quantitative studies of water and sanitation utilities: a benchmarking literature survey

Water Policy ◽  
2011 ◽  
Vol 13 (5) ◽  
pp. 591-606 ◽  
Author(s):  
S. Berg ◽  
R. Marques
Keyword(s):  
Quantitative Methods ◽  
Literature Survey ◽  
Production Functions ◽  
Water And Sanitation ◽  
Sanitation Services ◽  
External Regulation ◽  
Quantitative Studies ◽  
Governance Systems ◽  
Power Of Incentives ◽  
Over Time

This paper performs a literature update of quantitative studies of water and sanitation services (WSS), with an emphasis on tracking the benchmarking literature. There are 190 studies which use cost or production functions to evaluate the performance of WSS utilities. The studies examine: (1) the scale, scope or density economies of utilities in a particular country or region; (2) the influence of ownership on efficiency; (3) the existence and power of incentives associated with different governance systems (including external regulation); and (4) performance assessment (benchmarking). In addition, this paper presents patterns regarding quantitative methods adopted over time, as well as some major trends in results.

Contract Bargaining with a Risk-Averse Agent

2013 ◽  
Vol 13 (1) ◽  
pp. 285-301 ◽  
Author(s):  
Sanxi Li ◽  
Hao Xiao ◽  
Dongmin Yao
Keyword(s):  
Utility Function ◽  
Bargaining Power ◽  
Limited Liability ◽  
Bargaining Model ◽  
Risk Averse ◽  
Certainty Equivalents ◽  
The Social ◽  
Risk Neutral ◽  
Power Of Incentives ◽  
High Effort

AbstractThis article is the first to study a bargaining model in a moral hazard framework where the principal is risk neutral and the agent is risk averse. We show that the power of incentives increases with the agent’s bargaining power if the contracts induce a high effort. However, under reasonable assumptions about the agent’s utility function, the contracts induce a high effort less often as the agent’s bargaining power increases. As for the social welfare, we are surprised to find that a utilitarian, who cares about the sum of the two parties’ certainty equivalents, is worse off as the agent’s bargaining power increases. These results are in sharp contrast to the literature, which features risk-neutral agents protected by limited liability.

The Power of Incentives in Decision Making

2010 ◽  
pp. 1829-1838
Author(s):  
Geraldine Ryan ◽  
Edward Shinnick
Keyword(s):  
Mass Production ◽  
Industrial Structure ◽  
Added Value ◽  
Organisational Structure ◽  
Strategic Partnerships ◽  
Planning Systems ◽  
Compensation Systems ◽  
Managerial Roles ◽  
Electronic Access ◽  
Power Of Incentives

The organisation of the workplace is evolving. In many industries, mass production by large, vertically integrated, hierarchically organised firms is being replaced with more flexible forms of both internal organisation and industrial structure (Brynjolfsson & Mendelson, 1993). Work is increasingly accomplished through networks of smaller, more focused enterprises. Added value is generated by ever-changing coalitions, where each member of a coalition specialises in its area of core competence and controls it through the use of strategic partnerships. The information systems (IS) revolution has had an enormous influence on how organisations are managed. Electronic access, communication, and decision support influence several managerial processes and systems including the nature and scope of managerial roles, organisational structure, strategic planning systems, budgeting, performance measurement and review, incentive compensation systems, and knowledge management.

scholarly journals Partnerships versus Corporations: Moral Hazard, Sorting, and Ownership Structure

2014 ◽  
Vol 104 (1) ◽  
pp. 291-307 ◽  
Author(s):  
Ayça Kaya ◽  
Galina Vereshchagina
Keyword(s):  
Moral Hazard ◽  
Ownership Structure ◽  
Team Production ◽  
Trade Off ◽  
The Cost ◽  
Power Of Incentives ◽  
Effort Provision

Team production takes advantage of technological complementarities but comes with the cost of free-ridership. When workers differ in skills, the choice of sorting pattern may be associated with a nontrivial trade-off between exploiting the technological complementarities and minimizing the cost of free-ridership. This paper demonstrates that whether such a trade-off arises depends (i) on how the power of incentives required for effort provision varies with workers’ types, and (ii) on whether the workers are organized for production in partnerships or in corporations. These results have implications for how production is organized in different industries—in partnerships or in corporations. (JEL D21, D82, G32, M12, M54)

The Power of Incentives

2000 ◽  
Vol 90 (2) ◽  
pp. 410-414 ◽  
Author(s):  
Edward P Lazear
Keyword(s):  
Power Of Incentives
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