Economics Of Incentives Research Articles

Who Holds the Right to Exclude for Machine Work Products?

This article investigates whether the inventions and works created by Artificial Intelligence should be patent-able and copyright-able and if so, who should be assigned these rights. This article uses US case law and incentive economics to answer these questions. This article discusses who of the machine, its creators, owners, or operators should be assigned the rights to exclude others if policymakers want to promote the progress of science and useful arts. All four candidates raise legal problems. Based on current law, the users may be able to patent their invention but other works would fall into the public domain. Assigning exclusion rights to any party distorts the incentives of the other parties. The Intellectual Property system is maladapted to deal with these intelligent machines. Instead, these inventions and works should fall into the public domain. The four candidates can use alternative business models to profit from the machine’s creations.

Pay For Performance and Beyond

Incentives are often associated with narrow financial rewards such as bonuses or executive stock options. But in general such rewards are just a small part of the design of incentives. Properly designed incentive systems have to take into account the full portfolio of activities that the agent can engage in, the array of instruments, many nonfinancial, that are available to influence individuals and consider the factors that motivate them in different settings. Thinking about incentives as a system of interacting instruments and influences has been a major advance in the economics of incentives in recent years. In this lecture I will describe the path from pay for performance to the broader view of incentive systems. (JEL D21, D82, D86, J33, J41, M12, M52)

Innovation as a Vector of Regional Economic Development and a Necessary Condition for the Progress of the World Economy

Innovative development is an essential component of economic development, responding to global challenges of our time. Please be aware that nowadays there is a great increase of not only the practical implementation of innovative technologies and processes, but also of theoretical understanding of these trends in theoretical studies. Exploring the nature of innovation processes and factors of their incentive economics focuses on the large-scale process of generating ideas and theories, issues of priority, issues of innovation, and economic and cultural backgrounds’ need for innovative ideas. Innovation is the result of the transformation of ideas, research, development, new or improved scientific and technical, socio-economic, political and other decisions that promote, improve the quality and standards of living of the population and national security through the harmonization of the economic interests of economic entities (profit firms), market of consumer interests (needs at the lowest cost) and interests of society (rationalization needs, environmental protection, reduction of unemployment, the growth of the tax base, increase in average household incomes, reducing their differentiation, growth of intellectual potential of society, increase in life expectancy, increasing competitiveness of regions, countries and so on. Therefore, it is necessary to identify the role of innovation in the development of regional and global economy, which this study is dedicated to.

Healthcare Economics of Incentives to Encourage Healthy Behavior

Healthcare Economics of Incentives to Encourage Healthy Behavior

About the Authors

About the Authors

Bureaucracy, Its Reform and Development

Few aspects of economic policy elicit more conflicting opinions than the role of bureaucracy in policy making and implementation. These range from Max Weber’s picture of a rule-governed efficient institution to the ‘Yes, Minister’ caricature of one bound in complex red tape, operating inefficiently and serving the interests of its own officials. In this article, I attempt a better understanding guided by the economics of incentives and organisations. I emphasise the multidimensional complexity of government bureaucracies—they are answerable to multiple political principals, must handle multiple tasks, have multiple levels of hierarchy and so on—and suggest some institutional and organisational reforms that seem relevant for India and other less-developed countries that wish to sustain growth and progress to and beyond a middle-income level.

Introduction to the Special Issues in Honor of Salvador Barberà’s 65th birthday

The size and quality of this two-volume special issue in honor of Salvador Barbera speaks to the wide scope of his contributions as a friend, co-author, mentor, and builder. We begin by framing some of Salvador’s important research contributions. The theory of social choice is at the very center of economic analysis. In the late 1960s, following various contributions by William Vickrey, Robin Farquharson, Edward Clarke, Ted Groves, Alan Gibbard and Mark Satterthwaite, the notion of strategy-proofness took form and, together with ideas emerging in game theory, produced an “economics of incentives”. This line of research became among the most fruitful work in all of social science of the last quarter of the twentieth century. Salvador Barbera is among the most influential scholars in this line of research, particularly on the voting models side. He stands among the world leaders. In particular, Salvador Barbera’s work on strategy-proofness has been of fundamental importance and he has made several seminal contributions. These begin with papers that follow from his Ph.D. thesis and are particularly concerned with strategyproofness when one allows some randomization in outcomes. Those papers helped uncover the role of chance or randomization in social decisions, and showed the limited extent to which that can help in mitigating individual incentives for manipulation. That work has recently sparked a series of interesting follow-up papers. Salvador’s other important works on strategy-proofness in such rich domains include insightful proofs based on pivotal voter arguments and extensions to infinite settings (in work with Bezalel Peleg).

Contributors

Contributors

Competition, Equity-Based Incentives and Risk

This article: a) critiques existing academic thought on economics of incentives and risk, b) analyzes the impact of Equity-Based Incentives (EBIs) and Employee Stock Options (ESOs) on risk and vice versa; c) introduces new theories of EBIs/ESOs; d) quantifies EBI/ESO dynamics.

The sociology of groups and the economics of incentives: Theory and evidence on compensation systems

When working together, people engage in non-contractual and informal interactions that constitute the sociology of the group. We use behavioral models and a unique survey of medical groups to analyze how group sociology influences physician incentive pay and behavior. We conclude that informal interactions among group members influence pay practices and behaviors, but the relationship is complex. No single aspect of group sociology is entirely consistent with all the patterns in the data. Factors emphasized in the economic theory of agency, notably risk aversion, also shape pay policies, but these factors cannot account for all the observed empirical relationships.

Efficiency of Equity-Based Incentives Taxation

The article seeks to: a) critiques existing academic thought on economics of incentives and risk, b) analyzes the impact of Equity-Based Incentives (EBIs) and Employee StockOptions (ESOs) on risk and vice versa; c) introduces new theories of EBIs; d) quantifies EBI/ESO dynamics.

The Sociology of Groups and the Economics of Incentives: Theory and Evidence on Compensation Systems

When working together, people engage in non-contractual and informal interactions that constitute the sociology of the group. We use behavioral models and a unique survey of medical groups to analyze how group sociology influences physician incentive pay and behavior. We conclude that informal interactions among group members influence pay practices and behaviors, but the relationship is complex. No single aspect of group sociology is entirely consistent with all the patterns in the data. Factors emphasized in the economic theory of agency, notably risk aversion, also shape pay policies but these factors cannot account for all the observed empirical relationships.

On the Efficiency of Equity-Based Incentives Disclosure and Information Assymetry

The article seeks to: a) critique existing academic thought on economics of incentives and contracts, b) analyze the impact of Equity-Based Incentives (EBIs) on risk and vice versa; c) show how EBIs cause information assymmetry,and vice versa. The use of EBIs and incentives are heavily influenced by economics of transactions. The optimal incentive contract is one that minimizes the costs of compliance, minimizes the propensity to commit fraud, maximizes the after-tax cash benefits to the grantee, maximizes shareholder value before compensating grantees and most accurately matches performance and reward. Incentive contracts can reduce moral hazard, agency and compensation-accuracy problems in companies; and the rates of new-business formation and entrepreneurship have been linked to EBI tax policy.

Survey Article: Optimal Tautness and the Economics of Incentives in Bureaucracies

This paper reviews the economic literature which deals with the tautness of plans and with its relevance to macroeconomic pressures in Soviet-type economies. It opens with a discussion of Kornai 's shortage economy, a systemic approach to pressure, which is an alternative to the plan-related tautness coined by Hunter, and deals tautness from the agency angle, both in a static framework and in a dynamic, ratchet-related, framework.

A survey of agency models of organizations

In recent years Neoclassical economists have begun to turn their attention to issues of firm organization, stimulated in large part by methodological advances in the economics of incentives and incomplete information. The paradigm on which much of this work is based views an organization as an agency relationship. Agency models incorporate two basic features of organizations: incomplete information and goal conflict among members of the organization. This essay characterizes and critiques the existing research on agency models of organizations in order to broaden the set of consumers of such models and to stimulate the production of new research.