Higher Incentives Research Articles

Determinants of Foreign exchange exposure during the COVID-19 crisis: A Multi-country evidence

ABSTRACT The research question of which firm-level factors make firms more vulnerable to exchange rate fluctuations during periods of crisis has rarely been explored by prior literature. Using a large sample of 1577 firms from 9 developed and 11 emerging countries, this study presents a comprehensive analysis of how firm-level factors affect firms’ foreign exchange exposure before and during the COVID-19 crisis. The results provide evidence of a substantial increase in firms’ linear exposure during the COVID-19 period. The cross-sectional analysis reveals that the effects of firm-level variables on exposure are more pronounced during crisis periods and are different from non-crisis periods. Firms that have effective asset utilization or large operating profit margins remain less exposed during times of stress. Contrary to hedging theory, firms that have high incentives to hedge such as firms with high financial leverage become highly exposed to currency fluctuations during crisis periods. The interaction analysis provides further evidence that firms with high leverage can limit their foreign exchange exposure during periods of crisis if they have high asset turnover or high operating profits. The results offer important practical implications to firms for risk management during periods of crisis.

Adaptive incentive-based demand response with distributed non-compliance assessment

Traditional residential incentive-based demand response (DR) programs use fixed incentive structures that do not incorporate closed-loop feedback to compensate for non-compliance by participants. In practice, such programs may not reliably meet their event goals. To address this challenge, real-time feedback can be used to adaptively modify the participants’ incentives, an approach which has not been proposed before. This paper proposes a flexible monitoring framework to detect potential non-compliance, whereby a second DR event is adaptively scheduled with higher incentives. In this context, constraints are presented to prevent over-compensation and gaming of the DR system by the participants. This novel dual-event design is implemented using a distributed event-stream monitoring framework to preserve scalability and ensure low monitoring costs. The merits of the proposed DR design are demonstrated at a utility-scale for 100,000 residents, while also considering the adoption of residential electric vehicles that are poised to increase the flexibility of the demand in the distribution system.

How common is the common-ratio effect?

The common-ratio effect and the Allais Paradox (common-consequence effect) are the two best‐known violations of Expected Utility Theory. We reexamine data from 39 articles reporting experiments (143 designs/parameterizations, 14,909 observations) and find that the common-ratio effect is systematically affected by experimental design and implementation choices. The common-ratio effect is more likely to be observed in experiments with a low common-ratio factor, a high ratio of middle to highest outcome, when lotteries are presented as simple probability distributions (not in a compound/frequency form), and with high hypothetical incentives.

Paramedic’s Trust and Compliances during COVID-19 Preparedness and Recovery Time

High trust in government’s capability is the key to public compliance in supporting COVID-19 management. The paramedic is a profession that has received attention during times of pandemics because they are on duty as frontlines with a high risk of transmission. This research analyzed a survey of 328 paramedics living in Jakarta to examine their perceptions of the COVID-19 pandemic, the government's readiness, the picture of their psychological condition, their trust in the government, and their belief in themselves in health services. The survey was conducted one week after WHO declared COVID-19 a pandemic. This descriptive study indicates that most respondents have serious concerns about the transmission of the virus. On the side, they are obliged by an oath of service, which demands that they are always ready to serve. Only 30% believe the government can handle COVID-19. All respondents strongly supported the "lockdown" policy in every public facility. This finding is consistent with interview data after the highest peak of COVID-19 transmission in September 2021.These findings also point that low trust is driven by inconsistent and less convincing communication of political officials. Despite paramedics' risky conditions, they are responsible for working, but paramedics at the forefront of handling COVID-19 patients require support policies such as higher incentives and the safest protective tools.

Participant retention in a fully remote trial of digital psychotherapy: Comparison of incentive types.

Numerous studies have found that long term retention is very low in remote clinical studies (>4 weeks) and to date there is limited information on the best methods to ensure retention. The ability to retain participants in the completion of key assessments periods is critical to all clinical research, and to date little is known as to what methods are best to encourage participant retention. To study incentive-based retention methods we randomized 215 US adults (18+ years) who agreed to participate in a sequential, multiple assignment randomized trial to either high monetary incentive (HMI, $125 USD) and combined low monetary incentive ($75 USD) plus alternative incentive (LMAI). Participants were asked to complete daily and weekly surveys for a total of 12 weeks, which included a tailoring assessment around week 5 to determine who should be stepped up and rerandomized to one of two augmentation conditions. Key assessment points were weeks 5 and 12. There was no difference in participant retention at week 5 (tailoring event), with approximately 75% of the sample completing the week-5 survey. By week 10, the HMI condition retained approximately 70% of the sample, compared to 60% of the LMAI group. By week 12, all differences were attenuated. Differences in completed measures were not significant between groups. At the end of the study, participants were asked the impressions of the incentive condition they were assigned and asked for suggestions for improving engagement. There were no significant differences between conditions on ratings of the fairness of compensation, study satisfaction, or study burden, but study burden, intrinsic motivation and incentive fairness did influence participation. Men were also more likely to drop out of the study than women. Qualitative analysis from both groups found the following engagement suggestions: desire for feedback on survey responses and an interest in automated sharing of individual survey responses with study therapists to assist in treatment. Participants in the LMAI arm indicated that the alternative incentives were engaging and motivating. In sum, while we were able to increase engagement above what is typical for such study, more research is needed to truly improve long term retention in remote trials.

Central environmental protection inspector and stock price crash risk-evidence from polluting industries firms in China.

In recent years, under the background of vigorously promoting environmental governance, the implementation effect of the central environmental protection inspection is an issue of great concern to the government and the public. This paper systematically investigates the impact of central environmental protection inspection on the risk of stock price crash using a sample of listed firms in polluting industries. The results show that compared with non-supervised areas, central environmental protection inspection can reduce the polluting industries' firms' stock price crash risk by reducing stock price bubbles. After a series of robustness tests, the results still held. The above transmission mechanism is more effective in the samples of private enterprises, low information transparency and disclosure quality enterprises, non-national civilized urban areas, and high promotion incentive areas. Furthermore, this paper found that there were differences in the effects of central environmental protection inspection in different batches. Among the effects of central environmental protection inspection in different batches, the effect of environmental regulation in the second, third, and fourth batches was better, and the effect of central environmental protection inspection in different batches gradually deepened. Finally, by analyzing the environmental governance of the central environmental protection inspection, it is found that the central environmental protection inspection has significant short-term and long-term control effect in air pollution governance, and it is still necessary to strengthen the law enforcement in water pollution governance.

Investment in CO2 capture and storage combined with enhanced oil recovery in China: A case study of China's first megaton-scale project

In recent years, China has accelerated the development of CCUS (CO2 capture, utilization and storage) technology and started construction of the first megaton-scale CCS-EOR (CO2 capture and storage combined with enhanced oil recovery) project. Taking China's first megaton-scale CCS-EOR project as an example, this study constructs a comprehensive evaluation method that integrates the decision rules of the real option approach and net present value approach to evaluate the economics and investment strategies of China's CCS-EOR projects under multiple uncertainties. The results show that the project investment in 2022 can create a profit of 2.94 million USD because of the introduction of a tax credit policy that will begin in 2030 with an initial amount of 10 USD/ton of CERs (certified emission reductions) and an annual increment of 2 USD/ton of CERs, but the optimal time to invest should be 2025. Without this incentive policy, the profit opportunity and ability of the case project will be greatly reduced. In addition, the decision-making of CCS-EOR project investment is extremely sensitive to capital cost, oil production, incentive policy start time, and incentive intensity. Therefore, China should formulate and implement tax credit incentives or similar policies with a high incentive intensity as soon as possible to improve the confidence of potential CCUS investors. Direct financial support for early CCS-EOR projects through government financial allocations should be an important addition. In addition, enterprises should strive to accurately calculate and forecast the capital cost and oil production.

Depreciating Licenses

Many governments assign use licenses for natural resources, such as radio spectrum, fishing rights, and mineral extraction rights, through auctions or other market-like mechanisms. License design affects resource users’ investment incentives as well as the efficiency of asset allocation. No existing license design achieves first-best outcomes on both dimensions. Long-term licenses give owners high investment incentives but impede reallocation to high-valued entrants. Short-term licenses improve allocative efficiency but discourage investment. We propose a simple new mechanism, the depreciating license, and we argue that it navigates this trade-off more effectively than existing license designs. (JEL D44, D45, H82, K11, Q28, Q38, Q58)

How manipulating incentives and participation in green programs affect satisfaction: The mediating role of warm glow

Sustainable consumption and green marketing are receiving considerable attention. Nevertheless, the focus of past studies has always been on customer participation, with less attention given to how to satisfy those customers. Also, the focus has been on participants in green programs and not those who choose not to participate. The use of incentives to encourage voluntary green program participation is quite uncommon. The purpose of this research is to examine how manipulating the different types and levels of incentives affect the relationship between voluntary green program participation and satisfaction through the mediating role of warm glow. Three experimental studies were carried out, and data were tested and analyzed using SPSS and PROCESS macro. Results show that the best option to be used by managers to satisfy participants and non-participants of green programs when incentivizing participation is the high self-benefiting incentive. Yet, if this is not feasible, then the second-best option is not to incentivize participation.

Evaluation of Correlations and Cluster Analysis of Genetic Variants, Heritability, and Genetic Advances Using Mutagens Driven Ten Variants of Brassica Campestris

The review was taken up to appraise genotypic and phenotypic changeability, heritability with hereditary development, relationship, and bunch examination on development and yield boundaries in 10 variations of assortment T-9 of Brassica campestris (toria). These variations were acquired through mutagenesis. Examination of change uncovers that there are profoundly massive contrasts among every one of the characteristics considered. Completely, phenotypic coefficients of fluctuation were higher than their separate genotypic coefficients of change for every one of the characteristics. High GCV was noticed for cases plant-1, snout length, and seed yield plant-1 while most noteworthy PCV was displayed for auxiliary branches plant-1. Expansive sense heritability went from most reduced 16.41 for auxiliary branches per plant to most noteworthy 72.35 for plant level. Units plant-1, plant level, mouth length, case length, and seed yield plant-1 showed high hereditary development over mean percent. The consequences of connection uncovered that seed yield plant-1 showed an exceptionally huge positive relationship with stem border, optional branches, cases on a fundamental raceme, unit plant-1, and 100 seed weight, albeit critical negative connection with bill length. The attributes which showed a positive connection with seed yield were the fundamental supporter of high seed yield plant-1. All genotypes were assembled into two groups at 3% linkage. Bunch I contains variations with a most extreme mean incentive for plant level, raceme length, and case length though group II genotypes showed high mean incentive for unit plant-1, 100 seed weight, and seed yield plant-1. The consequence of hereditary uniqueness in variations shows that it is useful in the choice of prevalent yield credits in the rearing system of oilseed Brassicas.

Labor unions and real earnings management

Using firm-level union membership data for the period of 2002–2016, we show that firms with higher union membership are more likely to engage in real earnings management than accrual-based earnings management, with abnormal production as the dominant form of real earnings management. We further show the causal effect of union membership on real earnings management by exploiting two natural experiments-the staggered enactment of state-level right-to-work (RTW) laws and the shock to unemployment insurance benefits (UIB)-as exogenous shocks to union power. Further exploration shows that the positive association between union membership and real earnings management is more pronounced for unionized firms with (1) high managerial incentives to reduce employee hiring and retention costs and (2) operating inflexibility created by labor overinvestment. Our evidence is consistent with managerial incentives for upward earnings management to mitigate employees' perceived job security and the cost of employee management in competitive labor markets.

Two tier model of exports drawback fraud detection system using intuitionistic fuzzy game theory

In the era of electronic governance, electronic filing of import bills of entry documents and export bills documents is in place. All countries are thinking to eliminate the non-tariff barrier globally and the concept of liberalization is being introduced. Import duty is imposed when any imports take place. The drawback is considered as the incentive given to the exporters by the government of a country to encourage exports. The drawback is calculated based on the declared value of exported items, item-wise/quantity-wise. Many unscrupulous exporters overvalue the exported goods to get the higher incentive. So, determining the actual valuation of exported goods is a very challenging task for customs officials to prevent drawback frauds. Customs officials are in the process of valuation of exported goods with their discretion/skills from time to time for detecting drawback frauds and prevent government losses by scrutiny exports documents, invoices, and examining the goods. In this paper, a two-tier duty drawback fraud detection system using intuitionistic fuzzy theory and game theory. In tier-1, an intuitionistic fuzzy approach has been applied to determine the sensitivity of goods whereas, in tier-2, a game theory has been used to maximize the payoff of respective country governance.

Bank earnings management and performance reporting of comprehensive income

FASB’s ASU 2011-05 mandated that comprehensive income (CI) and other comprehensive income (OCI) be reported in performance statements (a single income statement or a separate statement of CI) rather than equity statements. Employing a difference-in-differences research design with ASU 2011-05 as the treatment, I find that presenting accounting information in different statements affects bank earnings management, specifically, presenting CI and OCI in performance statements (especially in single-statements with net income) reduces earnings management through selective sales of available-for-sale (AFS) securities in the banking industry. I also find that the influence of ASU 2011-05 is primarily on banks with high equity incentives in the CEO’s compensation package or less CEO job security. Additional analyses suggest that performance reporting of CI and OCI increases the predictive ability of realized gains and losses of AFS securities; however, banks may manage loan loss provision as a substitute strategy when they have to decrease selective sales of AFS securities.

From skinner box to daily life: Sign-tracker phenotype co-segregates with impulsivity, compulsivity, and addiction tendencies in humans

Pavlovian conditioning holds the potential to incentivize environmental cues, leading to approach behavior toward them, even outside our awareness. Animal models suggest that this is particularly true for the so-called sign-tracker (ST) phenotype, which is considered to reflect a predisposition toward developing addiction-related behaviours. Despite its potential clinical relevance, few studies have demonstrated the translational validity of this model, likely due to difficulties in studying Pavlovian processes in humans. To fill this gap, we combined an ecological momentary assessment with ambulatory peripheral autonomic monitoring to test the hypothesis that traits associated with ST in preclinical studies would be associated with attribution of high incentive salience to reward-related cues. Several times for 2 days, participants were asked to rate the attractiveness of several preselected ecological rewards (e.g., coffee) and the preceding cues (the smell of coffee) while their electrocardiogram was recorded. While no absolute difference in subjective and physiological measures of motivational approach to daily cues compared with rewards emerged, individuals with high levels of impulsivity, obsessive-compulsive, and addiction-prone behaviors rated as more attractive and showed a greater increase in sympathetic arousal to cues versus rewards. The opposite pattern emerged for those with low levels in those dispositional traits, who responded more (both subjectively and physiologically) to rewards compared with their preceding cues. This study represents an attempt to answer the call to parcel complex behaviors into smaller constructs, improving the early detection of those who are vulnerable to develop psychopathological disorders, particularly in the domain of impulse control such as addiction.

Optimising small-scale electronic commerce supply chain operations: a dynamic cost-sharing contract approach

For small-scale electronic commerce supply chains, designing effective strategies to improve operational effectiveness, market share and long-term survival are essential aspects. However, researchers have given less attention in addressing these issues. This study proposes a dynamic cost-sharing contract for an e-tailer supply chain to address the issues of asymmetric information, long-term integration, and ineffective costs. We include consistency constraints to obtain stable incentives over time and eliminate the need for re-negotiation. The findings emphasise that the dynamic contract significantly reduces the overall supply chain costs. The consistency constraints guarantee high incentives, thus assuring the players remain in the total contract period and enable long-term integration.

Economic growth targets and green total factor productivity: evidence from China

This study explores the impact of economic growth targets on green total factor productivity (GTFP) based on a panel Tobit model and two manual datasets of 30 Chinese provinces from 2002 to 2019. We find that economic growth targets significantly inhibit GTFP, which is more pronounced in provinces that have high incentives when setting targets, use hard constraints when announcing targets, and fulfill their targets. In addition, we find that economic growth targets inhibit GTFP by undermining economic efficiency and aggravating environmental pollution. Moreover, the command-controlled environmental regulations weaken the inhibitory effect on GTFP, while market-motivated environmental regulations aggravate this inhibitory effect. Our findings confirm that the promotion assessment system based on economic performance leads to the irrationality of local governments in establishing economic growth targets, and the local governments pursue economic growth at the cost of development quality and sustainability.

Simulating the impact of demand-side policies on low-carbon technology diffusion: A demand-supply coevolutionary model

Alleviating the pressure of climate and energy calls for an improved understanding of how policy interventions influence the diffusion of low-carbon technologies (LCTs) among enterprises. With the rapid convergence of supply-side policy effects, implementing demand-side policies to drive LCT diffusion may be a promising area for carbon abatement action. This study proposes a demand-supply coevolutionary model embedded in two-layer network is to capture the LCT diffusion among supply-side enterprises and low-carbon consumption diffusion among demand-side consumers. Using this model, we simulate the effects of demand-side policies, including public procurement, financial incentives for consumers, public information dissemination, and policy mixes combined with these instruments on LCT diffusion. The results show that public procurement can effectively facilitate LCT diffusion and restrain the magnitudes of market fluctuations caused by demand-side dynamics in the diffusion process. The high consumer incentives facilitate the rapid diffusion of LCTs, but there are noticeable diminishing marginal effects; even if subsidies are only used on the demand side, the promotion effect on LCT can still be achieved through the demand-supply interaction. Furthermore, the public information dissemination improves LCT diffusion and stabilizes the adaptive behavior of enterprises, but its time-lag effect leads to the pattern of “hot policies and cold markets.” The introduction of policy mixes verifies these findings and reveals that although the public information dissemination is constrained by other policies, it may still be the premise of large-scale LCT diffusion. This study develops a valuable framework that enriches the modeling practice of LCT and provides insights for implementing well-designed policy packages.

SECTORAL MARKET POWER IN GLOBAL PRODUCTION: A THEORETICAL AND OBSERVATIONAL STUDY

In a globalized world, the distribution of value-added across firms depends on a number of factors that vary across space. A key factor is related to the different types of competition on the multilayer structure of production, which are characterized by different types of (market) power. In this paper, we first argue that PageRank centrality is able to capture sectoral market power within the complex structure of global production. We then study the empirical properties of this market power measure and demonstrate a power-law relationship between sectoral PageRank centrality and relative sectoral profits. This power-law relationship has (international) political economy implications as it demonstrates the high incentives of sectors to become more central to increase their relative profits.

Economic incentives of legal fees to public attorneys under the Brazilian Civil Procedural Code

Among the legal changes brought by the Brazilian Civil Procedure Code of 2015, there is a section that ruled that the attorneys’ fees shall be paid to public attorneys when any governmental entity is the wining party in a lawsuit. The present article analyses the incentives that such rule created to the public attorneys’ performance, based on the theory of the Economic Analyses of Law. Among the preliminary conclusions, is the inference that such rule created low and negligible incentives to the performance of federal government’s public attorneys and created high and significant incentives to municipal and state public attorneys, who are encouraged to perform in a way to maximize their individual gains, even when it is contrary to the public’s interest.

High incentives without high cost - The role of (perceived) stake sizes in dictator games

The external validity of dictator games conducted in a lab is often questioned due to the use of small stake sizes that do not correspond to real-world settings. A potential solution to this problem is based on how participant perceptions of stake sizes are affected by their numerical representation. In this paper, I vary the stake size and its numerical representation to examine whether the illusion of large stakes can be created convincingly by implementing inflated numbers through an experimental currency. The share allocated to the recipient does not differ across treatments in this large-sample online experiment. This finding demonstrates that neither an increase in stake size nor a change in its numerical representation influence the share allocated to the recipient in a dictator game.