Information Incentives And Commitment
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Information Incentives And Commitment An Empirical Analysis Of Contracts Between Government And State Enterprises
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Author : Lixin Xu
language : en
Publisher:
Release Date : 1999
Information Incentives And Commitment An Empirical Analysis Of Contracts Between Government And State Enterprises written by Lixin Xu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with categories.
May 1997 Written performance contracts, widely touted as a way to help state-owned enterprises improve performance, seem to fail. Why? Because information asymmetry, lack of government commitment, and lack of managerial commitment lead to weak incentives and shirking. Shirley and Xu analyze experience with written performance contracts between developing country governments and the managers of their state-owned enterprises. Such contracts have been a vogue since the mid-1980s, and substantial resources have been sunk into their design and enforcement, yet the few assessments to date show mixed results. Using a simple agency model, they identify how problems of weak incentives stemming from information asymmetry, lack of government commitment, and lack of managerial commitment can lead to shirking. They apply the model to a sample of 12 contracts with monopoly enterprises in six developing countries (Ghana, India, the Republic of Korea, Mexico, the Philippines, and Senegal). All suffer from serious contracting problems. They find no pattern of improved performance that can be attributed to the contracts. Only three of the 12 case-study companies showed a turnaround in total factor productivity after contracts were introduced, six continued past trends, and three performed substantially worse under contracts than they had before. Labor productivity improved at a faster pace in four cases, and deteriorated in none, but the improvement predated the contract. Performance contracting assumes that government's objectives can be maximized, and performance improved, by setting targets that take into account the constraints placed on managers. For this to occur, the principals must be willing to explicitly state their objectives, assign to them priorities and weights, translate them into performance improvement targets, provide incentives to meet those targets (or monitor the agents without incurring significant costs), and credibly signal their commitment to the contract. These conditions failed to materialize. Why would governments adopt contracts to which they were not committed or that were politically unrealistic? Sometimes because it enabled them to get foreign assistance. How explain the managers' lack of commitment? Not surprisingly, managers with information advantages and bargaining power, and with no strong incentives or commitment from the government, used their advantages to manipulate the targets so as to ensure that their performance would be judged satisfactory. Shirley and Xu outline the conditions under which performance contracts might succeed in improving performance. This paper - a product of the Finance and Private Sector Development Division, Policy Research Department - is part of a larger effort in the department to analyze the role of institutions and incentives in public sector management, as well as in the private sector. The study was funded by the Bank's Research Support Budget under the research project The Changing Role of the State (RPO 678-69).
Information Incentives And Commitment
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Author : Lixin Colin Xu
language : en
Publisher:
Release Date : 2016
Information Incentives And Commitment written by Lixin Colin Xu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
The Theory Of Incentives
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Author : Jean-Jacques Laffont
language : en
Publisher: Princeton University Press
Release Date : 2009-12-27
The Theory Of Incentives written by Jean-Jacques Laffont and has been published by Princeton University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-12-27 with Business & Economics categories.
Economics has much to do with incentives--not least, incentives to work hard, to produce quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory begun to emerge to place the topic at the heart of economic thinking. In this book, Jean-Jacques Laffont and David Martimort present the most thorough yet accessible introduction to incentives theory to date. Central to this theory is a simple question as pivotal to modern-day management as it is to economics research: What makes people act in a particular way in an economic or business situation? In seeking an answer, the authors provide the methodological tools to design institutions that can ensure good incentives for economic agents. This book focuses on the principal-agent model, the "simple" situation where a principal, or company, delegates a task to a single agent through a contract--the essence of management and contract theory. How does the owner or manager of a firm align the objectives of its various members to maximize profits? Following a brief historical overview showing how the problem of incentives has come to the fore in the past two centuries, the authors devote the bulk of their work to exploring principal-agent models and various extensions thereof in light of three types of information problems: adverse selection, moral hazard, and non-verifiability. Offering an unprecedented look at a subject vital to industrial organization, labor economics, and behavioral economics, this book is set to become the definitive resource for students, researchers, and others who might find themselves pondering what contracts, and the incentives they embody, are really all about.
Information Incentives And Education Policy
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Author : Derek A. Neal
language : en
Publisher: Harvard University Press
Release Date : 2018-06-01
Information Incentives And Education Policy written by Derek A. Neal and has been published by Harvard University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-06-01 with Education categories.
How do we ensure that waste and inefficiency do not undermine the mission of publicly funded schools? Derek Neal writes that economists must analyze education policy in the same way they analyze other procurement problems. Insights from research on incentives and contracts in the private sector point to new approaches that could induce publicly funded educators to provide excellent education, even though taxpayers and parents cannot monitor what happens in the classroom. Information, Incentives, and Education Policy introduces readers to what economists know—and do not know—about the logjams created by misinformation and disincentives in education. Examining a range of policy agendas, from assessment-based accountability and centralized school assignments to charter schools and voucher systems, Neal demonstrates where these programs have been successful, where they have failed, and why. The details clearly matter: there is no quick-and-easy fix for education policy. By combining elements from various approaches, economists can help policy makers design optimal reforms. Information, Incentives, and Education Policy is organized to show readers how standard tools from economics research on information and incentives speak directly to some of the most crucial issues in education today. In addition to providing an overview of the pluses and minuses of particular programs, each chapter includes a series of exercises that allow students of economics to work through the mathematics for themselves or with an instructor’s assistance. For those who wish to master the models and tools that economists of education should use in their work, there is no better resource available.
Incentives Commitments And Habit Formation In Exercise
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Author : Heather Royer
language : en
Publisher:
Release Date : 2012
Incentives Commitments And Habit Formation In Exercise written by Heather Royer and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with Economics categories.
Rapidly growing health-care costs have fueled interest in using financial incentives to improve health behaviors. Most of the research on financial incentives outside of clinical studies has been observational, limiting our ability to make causal inferences on their effectiveness. The few carefully-designed studies have generally found little lasting effect on behavior after the incentive program ended. We report on a large field experiment with employees of a Fortune 500 company which offered incentives for using the company gym. In addition to understanding the effects of incentives alone, we investigate a novel approach to generate lasting behavior change using self-funded commitment contracts. At the end of incentive period, half of the incentive group were offered the opportunity to create a self-funded commitment contract to motivate their own behavior. Workers responded strongly during the incentive period, doubling their rate of use of the company gym. After the incentive period ended, we find that those offered incentives only continued to attend at higher rates, but the effect was quite modest in magnitude. The availability of a commitment contract, however, substantially improved the long-run effects of the incentive program both during the commitment period and well beyond, offering a promising new approach to increasing the long-run effect of incentive programs.
The Influence Of Monetary Incentives On Goal Choice Goal Commitment And Task Performance
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Author : James A. Riedel
language : en
Publisher:
Release Date : 1987
The Influence Of Monetary Incentives On Goal Choice Goal Commitment And Task Performance written by James A. Riedel and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1987 with categories.
The purpose of this study was to determine the mechanism by which monetary incentives influence goal choice, goal commitment, and task performance. It was hypothesized that monetary incentives influence cognitions that determine these events. One hundred and thirty subjects recruited for a work simulation study were assigned randomly to groups that differed in terms of the magnitude of incentive offered for various levels of performance. Overall the results suggest that the effects of monetary incentives on goals and performance may be explained, in part, by their influence on the process of goal choice. Goal choice and commitment were positively related to performance. Also, goals mediated the effects of incentives on performance. A research model is proposed for use in predicting performance. Keywords: Goal setting, Motivation, Expectancy theory.
Information Sharing And Incentives In Organizations
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Author : Jean-Etienne de Bettignies
language : en
Publisher:
Release Date : 2018
Information Sharing And Incentives In Organizations written by Jean-Etienne de Bettignies and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
We study an organization, consisting of a manager and a worker, whose success depends on its ability to estimate a payoff-relevant but unknown parameter. If the manager has private information about this parameter, she has an incentive to conceal it from the worker in order to motivate him to search for additional information. If she could commit to an information-sharing policy, the manager would share her information more than under no commitment, though less than would be efficient. Further results on the effects of managerial ability, and on the interaction between managerial and worker abilities, are also derived.
Incentives And Test Based Accountability In Education
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Author : National Research Council
language : en
Publisher: National Academies Press
Release Date : 2011-10-18
Incentives And Test Based Accountability In Education written by National Research Council and has been published by National Academies Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-10-18 with Education categories.
In recent years there have been increasing efforts to use accountability systems based on large-scale tests of students as a mechanism for improving student achievement. The federal No Child Left Behind Act (NCLB) is a prominent example of such an effort, but it is only the continuation of a steady trend toward greater test-based accountability in education that has been going on for decades. Over time, such accountability systems included ever-stronger incentives to motivate school administrators, teachers, and students to perform better. Incentives and Test-Based Accountability in Education reviews and synthesizes relevant research from economics, psychology, education, and related fields about how incentives work in educational accountability systems. The book helps identify circumstances in which test-based incentives may have a positive or a negative impact on student learning and offers recommendations for how to improve current test-based accountability policies. The most important directions for further research are also highlighted. For the first time, research and theory on incentives from the fields of economics, psychology, and educational measurement have all been pulled together and synthesized. Incentives and Test-Based Accountability in Education will inform people about the motivation of educators and students and inform policy discussions about NCLB and state accountability systems. Education researchers, K-12 school administrators and teachers, as well as graduate students studying education policy and educational measurement will use this book to learn more about the motivation of educators and students. Education policy makers at all levels of government will rely on this book to inform policy discussions about NCLB and state accountability systems.
Real Incentive Effects Of Soft Information
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Author : Peter O. Christensen
language : en
Publisher:
Release Date : 2019
Real Incentive Effects Of Soft Information written by Peter O. Christensen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
Both soft, non-contractible, and hard, contractible, information are informative about managerial ability and future firm performance. If a manager's future compensation depends on expectations of ability or future performance, then the manager has implicit incentives to affect the information. We examine the real incentive effects of soft information in a dynamic agency with limited commitment. When long-term contracts are renegotiated, the rewards for future performance inherent in long-term contracts allow the principal partial control over the implicit incentives. This is because the soft information affects the basis for contract renegotiation. With short-term contracts, the principal has no control over the basis for contract negotiation, thus long-term contracts generally dominate short-term contracts. With long-term contracts, the principal's control over implicit incentives is characterized in terms of effective contracting on an implicit aggregation of the soft information that arises from predicting (forming expectations of) future performance. We provide sufficient conditions for soft information to have no real incentive effects. In general, implicit incentives not controllable by the principal include fixed effects, such as career concerns driven by labour markets external to the agency. When controllable incentives span the fixed effects of career concerns, the latter have no real effects with regard to total managerial incentives -- they would optimally be the same with or without career concerns. Our analysis suggests empirical tests for estimating career concerns that should explicitly incorporate non-contractible information.
Incentives And Commitment In An Organization Of Professionals And A Social Movement Organization Of Professionals
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Author : Harold L. Cook
language : en
Publisher:
Release Date : 1983
Incentives And Commitment In An Organization Of Professionals And A Social Movement Organization Of Professionals written by Harold L. Cook and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1983 with Organizational commitment categories.