Questions tagged [incentives]
The incentives tag has no usage guidance.
19 questions
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Moral hazard, prosecution and fines
I wonder whether there are theoretical or empirical papers on the pros and cons of giving back part of the fines paid by someone to cover a part of the costs endured by the prosecuting body.
I have in ...
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How can incentive compatibility be interpreted in terms of agents not wanting to imitate each other?
In my finance class, the professor seems to treat "incentive compatibility" to be equivalent to "none of the agents in the model have reason to imitate each other".
Is this a ...
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Does Dominant Strategy Incentive Compatibility apply to this modification of Rock Paper Scissors?
I understand the notion of Dominant Strategy Incentive Compatibility in auctions. I am wondering whether this concept can be extended to all games.
For example, the game "Rock Paper Scissors&...
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Why is Dominant-Strategy Incentive Compatibility treated as a virtue, and are there mechanism design models which treat it as undesirable?
Why is Dominant-Strategy Incentive Compatibility treated as such a ubiquitous virtue? In this lecture, the answer given from the perspective of a non-principal player is, "it's easy to play; you ...
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Incentive compatibility constraint with continuous types
I have a Principal agent problem where principal knows about the information about the agent which is critical to both the parties. Principal is a business tycoon who has an inside information about ...
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Design of efficient cheap talk communication
Are there any papers about efficient cheap talk communication, where the players achieve the equilibrium payoffs of a correlated strategy as in Aumann's seminal paper? Or in case no such paper exists, ...
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Is "avoiding being the bearer of bad news" an example of the "principal-agent problem"?
For example:
A king designs a bridge, and he unknowingly does a bad job. He asks an engineer for her opinion, but the engineer fears that if she tells the truth, the dictator will be angry with her.
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locating specific model from organizational economics
I am trying to find one specific model from organizational economics that I encountered in one of my past classes, but I cant remember the name of the model and google scholar search based on some of ...
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What's the difference between Ex-post Incentive Compatibility and Dominant-Strategy Incentive Compatibility
According to the Wikipedia definition of Dominant-Strategy Incentive Compatibility (DSIC):
DSIC means truth-telling is a weakly-dominant strategy, i.e. you fare best or at least not worse by being ...
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Strike time in a game
Suppose A forwards a puzzle to B where if B solves the puzzle within 24 hours then it gets a payoff of M (M>0), if not then it gets nothing i.e. 0. Consider A locks the money with the bank for the ...
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Which mathematics are required for fully understanding the theories of the firm?
When I say "theories of the firm", I'm referring, in particular, to the theories exposed in the next works: 1) Transaction Cost Economics exposed in "Transaction Cost Economics" by ...
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Business models based on things not happening
Could you provide examples of business models, where the service provider gets rewarded for things not happening (or at least not deteriorating). For instance, models where medics get rewarded when ...
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How do economists explain why people contribute to Wikipedia?
What incentives do contributors have?
I believe they earn no money. And usually, they earn no reputation either, because most of the contributions are anonymous.
I believe this is a public goods game. ...
user16353
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What is the meaning of "labor input" in the context of incentive theories?
In the article "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design" (Holmström and Milgrom, 1991) it is said that two identical agents ($i=1,2$) devote ...
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Is there a standard term for this tradeoff when subsidizing: inducing dependence vs providing support?
I've often heard it informally argued "people will become lazy if you give them handouts". Although I doubt the economic sophistication of most such assertions, I do think they have a real point: you ...
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What is a super deduction?
This is a term often encountered in documents published by the Big Four (Deloitte, Ernst & Young, Price Waterhouse Coopers, KPMG), for instance in the E&Y 2018 Worldwide R&D Incentives ...
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Incentive compatibilty conditions for multi-item auctions
In this paper by Myerson on optimal single item auctions, the incentive compatibility condition is shown to be equivalent to the following simpler conditions on the auction - (i) the allocation ...
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Has contest theory ever been used to design real-world contests?
Contest theory, very much like auction theory, studies how people act in a contest and the properties of such a competition. There is a large literature that investigates different aspects of the ...
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What are the economics behind web spam?
In this question, I'm referring to "web spam" on search engines (not email spam), such as placing misleading keywords on one's web page so that a pornographic site, for example, would get a lot of ...
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