Explicit Incentives Research Articles

The effects of mandatory quota policy on employment of disabled workers in Korea: a regression discontinuity design approach

ABSTRACT Managing the employment of people with disabilities has been a long-standing policy priority. A common policy tool for this purpose is mandatory quota policy, which is currently adopted in over 100 countries. However, knowledge regarding the genuine empirical effects of the policy net of auxiliary financial incentives remains limited. This study aimed to address this knowledge gap. Leveraging the unique setting of South Korea, where the thresholds for mandatory quotas and financial incentives differ, we estimate the direct effects of mandatory quotas using a rigorous quasi-experimental regression discontinuity design. The findings indicate that the quotas increased the employment of disabled workers even in the absence of explicit financial incentives, but also that the effects were heterogenous by different types of disabled employees, with male, full-time, and mildly disabled workers benefiting the most.

Executive pay restrictions, political promotion, and firm efficiency: Evidence from China

Using the mandatory reform in executive pay restrictions within Chinese state-owned enterprises (SOEs) as a quasi-natural experiment, we investigate the effects of compensation incentives and political promotion on firm efficiency. Our difference-in-differences analyses reveal that firm efficiency significantly decreases following the reform, and political promotion can attenuate this negative association. Firm risk-taking is a potential mechanism underlying this observed phenomenon. The negative relationship and mitigation effect are more pronounced for central SOEs and commercial class II SOEs. Furthermore, these findings exhibit variations based on distinctive attributes in compensation structures, CEO characteristics, and political promotion ranks. Overall, our study underscores the complementary roles of explicit and implicit incentives within SOEs, providing a strong rationale for government regulation and reform of executive compensation.

Multi-stage incentive contract design of aviation complex product multi-task delivery strategy

The increasing demand for aviation complex products makes complex product manufacturers pay more attention to delivery efficiency, and the efficiency and effect of delivery problems are the key factors that restrict delivery efficiency. A series of delivery strategy combinations of delivery subjects will affect delivery output and delivery efficiency. This study aims to design a long-term effective incentive contract, which stimulates the subjective initiative of the subject and then investigates the effect of the incentive contract on delivery efficiency under different combinations of delivery strategies. We consider the behavioral characteristics of each technical business department to expand the benchmark incentive model, such as the degree of perceived revenue fairness, the variation of the three relationships (neutrality, competition, and cooperation), and the level of technological transformation capability. The multi-stage incentive mechanism which combines explicit incentives and implicit incentives is developed to explore the optimal delivery strategies based on a benchmark model. The results show that incentive contracts can improve delivery efficiency and benefit delivery centers and technical business departments. The delivery decisions of the department are influenced by the closeness of department relationships and the fairness of assignment, and the departments tend to pay more effort in tasks with high relative importance and low effort cost. When the relative importance of tasks is equal to the ratio of marginal cost, a weak incentive zone in the delivery incentive contract exists. The incentive effect of reputation effect is obvious except for the last stage. Based on the designed incentive contracts, the subjective initiative of the participants can be effectively stimulated to empower complex product delivery.

INCENTIVE MECHANISMS OF AN EXPERIMENTAL RESOURCE-SHARING PLATFORM CONSIDERING REPUTATION EFFECTS FOR MEGAPROJECTS

Participating in megaproject experimental tasks would significantly improve the laboratories’ industry influence and future competitiveness. Thus, this paper introduces the long-term reputation effects of the incentive model of an experimental resource-sharing platform for megaprojects, which could motivate them to consider future benefits and improve their current efforts. The aim is to incentivize laboratories’ resource-sharing behavior more effectively and to increase the amount of resources shared by these laboratories on the platform, thus guaranteeing the long-term sustainability of the platform. It constructs the incentive model by combining dual implicit and explicit incentive mechanisms. It analyses the incentive mechanism of a reputation effect on laboratories compared with the pure explicit mechanism so that the primary conditions for reputation incentives can be obtained to achieve Pareto improvement. Finally, the proposed method is validated in combination with data simulation. The results show that although dual implicit and explicit incentive mechanisms could reduce the information asymmetry between the two sides and increase the efforts of laboratories and the benefits of the platform, the platform should not blindly increase the intensity of these incentives and need to consider the influence of the subsidies of these laboratories’ upfront inputs, the degree of sharing and their informatization capabilities.

Adult age differences in noninstrumental information-seeking strategies.

We often seek information without any explicit incentives or goals (i.e., noninstrumental information seeking, often noted as a manifestation of curiosity). Does noninstrumental information-seeking change with age? We tried to answer the question by making a critical distinction between two information-seeking behaviors: diversive information seeking (i.e., information seeking for topics a person knows little about) and specific information seeking (i.e., information seeking to deepen a person's existing knowledge of a topic). Five hundred participants (age range: 12-79 years old) spontaneously read new facts about different topics. After reading each fact, participants were given the choice to read more facts about the current topic or return to the selection menu to learn about a new topic. We found that with increasing age, participants chose to explore more facts within a topic (i.e., increased specific information seeking) and switched less frequently to new topics (i.e., decreased diversive information seeking). These results indicate that while young people seek out a broader range of information, as people grow older, they develop a preference to deepen their existing knowledge. (PsycInfo Database Record (c) 2024 APA, all rights reserved).

Segment disaggregation and equity‐based pay contracts

AbstractWe study the role of segment disaggregation in equity‐based pay contracts in diversified firms. Disaggregated segment disclosures can improve the observability of managerial actions in internal capital markets and thus increase implicit incentives for managers to allocate resources as desired by shareholders, substituting for explicit incentives provided to CEOs. We use the adoption of Statement of Financial Accounting Standards No. 131 as an identification strategy and find that firms affected by this segment reporting mandate significantly decreased the provision of equity‐based incentives in the post‐adoption period, especially for firms with higher operating volatilities. This effect is also more pronounced for firms with weaker board monitoring in the pre‐adoption period but with stronger external monitoring in the post‐adoption period. Overall, our results suggest that disaggregated segment disclosures reduce the use of equity‐based pay contracts in diversified firms by enhancing the monitoring of managers.

Carbon storage units and carbon storage obligations: A review of policy approaches

Policies that incentivize the capture and geological storage of CO2 from large point sources (‘CCS’; and more recently, atmospheric removals), have so far tended to reward the resultant avoided CO2 emissions (or CO2 removals) achieved by operators at the point of capture. The expectation has been that geological CO2 storage sites, as well as the connecting infrastructure, will be developed and operated based upon the funding delivered from the single point of incentive (e.g. under an emissions trading system or a carbon tax, only CO2 capture installation operators are absolved of the obligation to acquire and surrender CO2 emission rights or to pay the tax). Project-based crediting mechanisms (e.g. in the voluntary carbon market) tend to treat the entire chain of operations as a single entity to be supplied with emission reduction or removal credits. Consequently, there has been minimal explicit financial incentive to store CO2. Yet a multiple gigaton-per-year scale capture and storage industry requires complex CO2 networks to evolve, with multiple sources connecting to multiple sinks, with installations owned by different operators with different technical expertise, climate mitigation goals and obligations. This multiplicity of goals and incentives can create agency problems and cross-chain risks, which impact negatively upon investment decisions. In this paper, we review the history, evolution and potential of geological net zero (GNZ) and carbon storage (or takeback) obligation concepts applied to fossil carbon producers and suppliers as a means to address these risks alongside policies aimed at atmospheric net zero (ANZ) and fossil carbon emitters.

O voto remoto pode mitigar os problemas de agência?

ABSTRACT Purpose: Board members are critical in resolving agency conflicts. How- ever, many are unable to perform their function due to their distance, as they are not present at board meetings. As of Instruction no. 561, the Brazilian Securities and Exchange Commission (CVM) regulated remote voting for Boards of Directors, allowing for greater attendance at meet- ings and, as a result, increased involvement. In this context, this research examines the effect of remote voting by Boards of Directors on execu- tive compensation and financial performance of publicly traded firms in Brazil. Originality/value: This research is innovative in the sense that it exam- ines the effect of the Board of Directors remote voting on the CEO com- pensation and financial performance of the firm, using an innovative methodology. Design/methodology/approach: We applied a quasi-experimental method (difference-in-differences) to assess the effects of a given group (treat- ment) before and after the event, significantly reducing endogeneity when considering an exogenous shock to the system. Findings: As a result, the estimation of the main model reveals statisti- cally significant differences between the effects of treatment and control on profitability and executive remuneration, indicating that remote vot- ing mitigated agency problems by generating a substitution effect for explicit incentives (as evidenced by the decrease in executive remunera- tion) and by providing greater accounting performance for companies.

Unlocking Mutual Gains-An Experimental Study on Collaborative Autonomous Driving in Urban Environment.

Convoy driving, a specialized form of collaborative autonomous driving, offers a promising solution to the multifaceted challenges that transportation systems face, including traffic congestion, pollutant emissions, and the coexistence of connected autonomous vehicles (CAVs) and human-driven vehicles on the road, resulting in mixed traffic flow. While extensive research has focused on the collective societal benefits of convoy driving, such as safety and comfort, one critical aspect that has been overlooked is the willingness of individual vehicles to participate in convoy formations. While the collective benefits are evident, individual vehicles may not readily embrace this paradigm shift without explicit tangible benefits and incentives to motivate them. Moreover, the objective of convoy driving is not solely to deliver societal benefits but also to provide incentives and reduce costs at the individual level. Therefore, this research bridges this gap by designing and modeling the societal benefits, including traffic flow optimization and pollutant emissions, and individual-level incentives necessary to promote convoy driving. We model a fundamental diagram of mixed traffic flow, considering various factors such as CAV penetration rates, coalition intensity, and coalition sizes to investigate their relationships and their impact on traffic flow. Furthermore, we model the collaborative convoy driving problem using the coalitional game framework and propose a novel utility function encompassing incentives like car insurance discounts, traffic fine reductions, and toll discounts to encourage vehicle participation in convoys. Our experimental findings emphasize the need to strike a balance between CAV penetration rate, coalition intensity, size, and speed to realize the benefits of convoy driving at both collective and individual levels. This research aims to align the interests of road authorities seeking sustainable transportation systems and individual vehicle owners desiring tangible benefits, envisioning a future where convoy driving becomes a mutually beneficial solution.

The role of primary care providers in testing for sexually transmitted infections in the MassHealth Medicaid program.

The objective of this study was to determine the prevalence and predictors of testing for sexually transmitted infections (STIs) under an accountable care model of health care delivery. Data sources were claims and encounter records from the Massachusetts Medicaid and Children's Health Insurance Program (MassHealth) for enrollees aged 13 to 64 years in 2019. This cross-sectional study examines the one-year prevalence of STI testing and evaluates social determinants of health and other patient characteristics as predictors of such testing in both primary care and other settings. We identified visits with STI testing using procedure codes and primary care settings from provider code types. Among 740,417 members, 55% were female, 11% were homeless or unstably housed, and 15% had some level of disability. While the prevalence of testing in any setting was 20% (N = 151,428), only 57,215 members had testing performed in a primary care setting, resulting in an 8% prevalence of testing by primary care clinicians (PCCs). Members enrolled in a managed care organization (MCO) were significantly less likely to be tested by a primary care provider than those enrolled in accountable care organization (ACO) plans that have specific incentives for primary care practices to coordinate care. Enrollees in a Primary Care ACO had the highest rates of STI testing, both overall and by primary care providers. Massachusetts' ACO delivery systems may be able to help practices increase STI screening with explicit incentives for STI testing in primary care settings.

Managing the changing understanding of benefits in software initiatives

When deciding to develop new software, that decision should be based on a clear understanding of the intended benefits the system can lead to. But what if the understanding of those benefits fluctuates. In this article, we investigate the understanding that stakeholders have or build of the benefits of the system under development, and what role that understanding plays. We conducted four studies: an exploratory study based on 22 interviews on nine projects that had explicit incentives to conduct benefits management, a confirmatory study based on a survey (n=110) of concepts of benefits understanding developed in the first study, and two explanatory studies arranged as focus groups (five participants in each) on issues that arouse during analysis of the first two studies. We find that it is common for stakeholders’ understanding of benefits to change during and after development (reported by 96% of respondents from their latest digitalization efforts). Predicting and managing the changes to understanding of benefits is not straightforward. This leads to uncertainty, both for investment decisions and how to manage benefits. We conclude that, rather than focusing on cookbook recipes for benefits management, more emphasis should be focused on helping practitioners embrace changes to understanding of benefits.

Discursive Norms and Incentives for Equipping Students with Religion and Worldview Literacy in Swedish Preschool Teacher Education Policy

The increasing societal diversity of religions and worldviews (R&W) in Swedish preschools affects what competencies today’s preschool teachers need and what needs to be taught in Swedish Preschool Teacher Education (PTE). The study aims to investigate the content and discursive norms regarding religion and worldviews in Swedish PTEs on a national policy level and contribute to knowledge in the research field of Religious Studies and Higher Education. The PTE curricula of all the twenty Higher Education institutions offering PTE in Sweden in 2022 are investigated using text-centred discourse analysis, together with a theoretical and analytical tool for analyzing different dimensions of the PTEs and the potential for them to function as socially sustainable communities of care. The results show that even though there might be implicit incentives for teaching about R&W, all but one of the educational curricula of the twenty PTEs in Sweden lack explicit mention of ‘religion’. Based on the results, we can see that at a national policy level, the content of the educational curricula reproduces liberal secular and humanist worldviews as norms for the PTEs. There is also a lack of explicit policy-related incentives for the PTEs to promote social sustainability regarding equipping students with proper knowledge and skills for developing care-centered and norm-critical R&W literacy.

Explicit incentives increase citizen science recordings

AbstractFrom tracking land‐use change to biodiversity loss, citizen science data have become a cornerstone for conservation. However, policymakers must understand the “data‐generating process” to make good use of existing citizen science data and encourage the production of useful new data. We analyze data from the two largest German online platforms for ecological observations to explore and quantify the effect of explicit incentives on volunteer recordings, created by a large‐scale prize competition on one of the platforms. We find 10% more recordings during the prize competition. Moreover, the effects of weather and weekends are attenuated during the competition period. Finally, the diversity of recorded species decreases. Our study shows the first statistical evidence that using explicit incentives increases the quantity of citizen science data. It highlights the need to further study the effect of explicit incentives on data quality and the engagement of citizens for conservation.

Zero is hero: Round number effects on knowledge-sharing platforms

With the inherent public goods problem embedded in knowledge-sharing platforms, various incentive mechanisms have been implemented, most of which are in the form of gamified elements. Among those motivating elements, reputation points are the most direct feedback about individuals’ contribution effort, which use numerical units indicating progress. Although some research has found that points can incentivize users to contribute, empirical evidence regarding the influential patterns of such numerical units remains limited. Drawing on numerical cognition literature that an individual's evaluation and judgments may be influenced by certain numerical cues, we particularly focus on the round number bias on knowledge-sharing platforms. Several hypotheses regarding users’ behavioral changes when their accumulated points approach round numbers have been proposed, including their contribution level, contribution quality, and writing style. By analyzing data collected from StackOverflow.com, we find that users perceive round numbers as category boundaries or endpoints and crossing such boundaries can motivate aspirational behaviors. Concretely, users significantly increase their post frequency and length, and write answers with more function words and second-person pronouns. Meanwhile, their posts will be more likely to be accepted as the best answers and gain more votes. We also explore the moderating effects of advanced explicit incentives and numbers’ magnitude. Theoretically, our research contributes to a body of literature on knowledge-sharing platform incentive mechanisms to motivate users’ contributions and sheds light on the utilization of numerical cues to guide individuals’ behaviors in user-generated-content (UGC) provision context.

Improving performance in upper-division electricity and magnetism with explicit incentives to correct mistakes

Improving performance in upper-division electricity and magnetism with explicit incentives to correct mistakes

Deputizing financial institutions to fight elder abuse

Permissive laws deputize financial professionals to screen for misbehavior without providing explicit incentives. These are very common in financial markets. To evaluate their effectiveness, we exploit the staggered adoption of the 2016 Model Act provisions intended to curb elder abuse. We find a drop in reports of abuse by financial professionals to the Department of Treasury and, separately, in financial crimes against the elderly as monitored by the FBI. The effect is stronger where the elderly are more isolated. Our results highlight the role financial professionals play in combating social problems and the impact of permissive policies.

Whether Economic Policy Uncertainty Instigates an Increase in The Cash Holdings of Singaporean-Listed Firms?

Our paper investigates how economic policy uncertainty (EPU) affects Singaporean-listed firms’ corporate cash holdings after the global financial crisis. We apply various technical analyses for panel models of 4,253 yearly observations. Our results indicate that the Singaporean-listed firms’ cash holdings ratio (CHR) decreases when Singapore’s EPU increases in the period 2009–2018. Further, either global EPU or U.S. EPU indicators are correlated negatively with Singaporean-listed firms’ cash reserves. The corporate managers’ precautionary motive was not urged by the rise of EPU in the Singapore market. On the other hand, our empirical evidence suggests that Singapore’s corporate managers have an explicit speculative incentive in the context of the increased EPU in the post-financial crisis period. This research provides evidence that is at odds with the corporate managers’ classical view on precautionary cash savings in the context of the increased uncertainty of economic policy.

Executive Compensation Incentives and Corporate R&D Investments: An Analysis Based on the Moderating Effect of Managerial Power

ABSTRACT Using data on Chinese A-share listed companies, this paper explores the interactive effects of managerial power and executive compensation incentives on corporate R&D investments. We find that higher executive monetary compensation and perquisite consumption help increase corporate R&D investments, while a large compensation gap within the management team can inhibit corporate R&D investments. We further show that managerial power has different moderating effects on the relation between management incentives and corporate R&D investments. Managerial power weakens the positive effects of explicit and implicit incentives of executives on corporate R&D investments, while it strengthens the negative effect of the compensation gap within the management team on corporate R&D investments.

Environmental delegation versus sales delegation: a game-theoretic analysis

AbstractRecently, in their 2019 paper, Poyago-Theotoky and Yong consider a managerial Cournot duopoly with pollution externalities and emission taxes and propose an explicit environmental incentive in a managerial compensation contract. The authors compare several exogenous equilibria emerging in the symmetric sub-games in which the owner offers either the environmental delegation contract or the standard sales delegation contract: abatement and social welfare (resp. emission taxes) under environmental delegation are higher (resp. lower) than under sales delegation. The present work extends their model using a game-theoretic approach to analyse the asymmetric sub-games, in which only one firm adopts the environmental contract, and adds the contract decision stage. Results show that the environmental contract never emerges as the unique sub-game perfect Nash equilibrium of this non-cooperative managerial decision game. Indeed, if the green R&D technology is efficient, the sales contract emerges as the unique Pareto-inefficient Nash equilibrium. Otherwise, if the green R&D technology is inefficient, multiple Nash equilibria in pure strategies exist (coordination game). Our findings offer direct policy implications.

Presenteeism as a moral hazard problem: Implications for the human resource management

Abstract Information asymmetry about the employee's state of health means that workers may decide to work (or not) when they are sick, which turns presenteeism into a principal-agent relationship. From this new perspective, presenteeism can be explained by some distinct and original factors such as implicit incentives related to motivation and a sense of autonomy (empowerment, job usefulness, and recognition) and explicit incentives given by wages and other non-economic benefits (training and career prospects). In a sample of European workers using multilevel (by country) Tobit models, we find that short-term incentives and workers' empowerment increase presenteeism, while long-term incentives reduce it. As expected, supervision is ineffective in controlling presenteeism, while relationships based on trust have a positive impact. Finally, we propose several practices related to incentives, training, monitoring, occupational health and safety and job design specifically intended to manage presenteeism and its consequences in six areas of the human resources function.