Level Of Incentives Research Articles

Solar PV as a mitigation strategy for the US education sector

Solar photovoltaic (PV) is an important strategy to de-carbonize the energy sector in the United States and to reduce the health, environmental, and climate change damages associated with the production of electricity from fossil fuel sources. While the potential for solar PV in the residential and commercial sectors has been widely studied, the potential in educational buildings is largely unknown. Educational institutions account for 11% of total US building electricity consumption and 14% of building floorspace. These buildings also contribute to approximately 4% of total US CO2 emissions, thus playing a potentially important role in climate mitigation strategies. We estimate the electricity use for 132k educational institutions across the US and estimate electricity generation, greenhouse gas and health damaging air emissions reductions, and private and social costs and benefits that would result from adopting rooftop solar PV. We find that solar PV in US educational institutions could provide 100 TWh of electricity services annually, meeting 75% of these buildings’ current electricity consumption. We estimate the highest generation potential in Texas, California, and Florida with K-12 public educational institutions comprising the bulk of that generation. The provision of electricity services from rooftop solar PV on educational institutions could reduce health, environmental, and climate change damages by roughly $4 billion per year (assuming a social cost of carbon of $40/ton and value of statistical life of $10M in 2018 USD). Two key findings from this study are that: (i) the private costs of solar for educational institutions still exceed the private benefits from reduced electricity consumption across the entire country (unless a third party operation model is used, in which case some locations can have net-benefits), and (ii) with the exceptions of California and New York, the social health, environmental and climate change benefits exceed the levels of current incentives provided by the state and retail subsidies.

To burn or retain crop residues on croplands? An integrated analysis of crop residue management in China

Crop residue burning influences human health and global climate change. In China—the world's largest crop residue producer—farmers burn almost one quarter of their crop residues in the field after harvest, despite the government providing financial incentives such as subsidies to retain crop residues. This study combined economic analyses with simulations of soil carbon accumulation and carbon emission reduction associated with different residue management practices to determine the minimum level of incentives needed for Chinese farmers to shift from burning to retaining crop residues for generating carbon benefits. Simulation results showed that [1] the density of topsoil organic carbon in China's croplands would have increased from about 21.8 t ha−1 in 2000 to 23.9 t ha−1 in 2010, and soil organic carbon sequestration would have reached 24.4 Tg C yr−1 if farmers had shifted from burning to retaining crop residues on croplands during this period; and [2] retaining crop residues would have avoided about 149.9 Tg of CO2 emission per year. Economic analyses showed that [1] existing subsidies in all regions of China, except Northeast China, only accounted for 18–82% of the incentives required for farmers to shift from burning to crop residue retention; [2] Northeast China required the lowest incentive (287 CNY ha−1), while eastern China required the highest (837 CNY ha−1); and [3] the prevailing market prices (1.4–60.2 CNY tCO2e−1) in China's seven pilot carbon markets seem to be below the required incentives (39.6–189.1 CNY tCO2e−1). Our study suggests that the Chinese government should increase subsidies or seek innovative incentive schemes to encourage farmers to change their crop residue management practices for global climate change mitigation and health benefits.

Do Interviewers Moderate the Effect of Monetary Incentives on Response Rates in Household Interview Surveys?

Abstract As citizens around the world become ever more reluctant to respond to survey interview requests, incentives are playing an increasingly important role in maintaining response rates. In face-to-face surveys, interviewers are the key conduit of information about the existence and level of any incentive offered and, therefore, potentially moderate the effectiveness with which an incentive translates nonproductive addresses into interviews. Yet, while the existing literature on the effects of incentives on response rates is substantial, little is currently known about the role of interviewers in determining whether or not incentives are effective. In this article, we apply multilevel models to three different face-to-face interview surveys from the United Kingdom, which vary in their sample designs and incentive levels, to assess whether some interviewers are more successful than others in using incentives to leverage cooperation. Additionally, we link the response outcome data to measures of interviewer characteristics to investigate whether interviewer variability on this dimension is systematically related to level of experience and demographic characteristics. Our results show significant and substantial variability between interviewers in the effectiveness of monetary incentives on the probability of cooperation across all three surveys. However, none of the interviewer characteristics considered are significantly associated with more or less successful interviewers.

China’s Investment Incentive Strategy for Shale Gas Development

ABSTRACT Against the backdrop of the uncertainty and irreversibility of shale gas development investment, we use the real option analysis framework to study how the government can optimally arrange an investment incentive policy for shale gas development and promote the immediate investment of enterprises under shale gas price uncertainty. In this article, we present two types of investment incentive policies for shale gas development, namely tax reductions and production subsidies. The output characteristics of shale gas development are included in the real option model. From this study, the government incentive level required to trigger the immediate investment of enterprises will rise with an increase in shale gas price volatility and the output decline rate and decrease with an increase in the initial gas recovery rate. When shale gas price volatility and the output decline rate are less than a certain level or the initial recovery rate is greater than a certain level, enterprises’ investment will be spontaneous, even without government incentives. The study reveals that shale gas development incentives for the immediate investment of enterprises need to focus not only on the uncertainty of the external environment, but also on the shale gas resource endowment characteristics in Chinese regions.

Using the health benefits of electric vehicles to justify charging infrastructure incentives

Health benefits from switching from internal combustion vehicles (ICVs) to electric vehicles (EVs) include reduction of healthcare costs from treating cardiopulmonary illness, less sick leave and quality and length of life improvements. This paper compares the financial value of those benefits with the cost of building an EV charging infrastructure, using empirical data to investigate whether there is a net benefit. In most scenarios of balanced growth, when the number of charging stations increases with the number of EVs the net benefit is positive. Rapid build-out of charging stations over 2-4 years associated with government targets for EVs in 2020 and in 2025 have a net cost during the build-out period with net benefits from 2021 onwards. Since health benefits accrue to governments, businesses and individuals, these results justify the use of government incentives for charging station deployment and this paper quantifies the impact of different levels of incentive.

Financial support for the competitiveness of employees in the mining industry

The development of a socially oriented market economy in Ukraine, the effective implementation of reforms in this direction and the improvement of the well-being of the population is not possible without qualitative financial support for the competitiveness of workers, above all, in the mining industry. However, the absence of effective levers of influence on the organization of high-tech production in this area, its considerable intensiveness of material and energy, and its complexity and harm have negatively affected the labor motivation of miners and the profitability of mining enterprises. Therefore, the urgent issues at the current stage of development of Ukraine's mining industry are determining the conditions and opportunities for increasing the competitiveness of employees in this industry. Scientific novelty of the results is to identify, substantiate and analyze the main stages of financial support for the competitiveness of workers in the mining industry under the conditions of a changing vector of the country’s foreign economic policy and of market for products of this industry. The obtained results of the research are the basis to both the study and practical solution of the problem of how to increase the competitiveness of miners in enterprises under various forms of management. This approach involves not only a high level of material incentives for highly qualified specialists in mining, but also a comprehensive development of personnel potential in this industry as a whole.

CEO inside debt, market competition and corporate risk taking

Purpose The purpose of this paper is to investigate the effect of market competition on the relation between CEO inside debt and corporate risk-taking. Design/methodology/approach Ordinary least squares regressions are used to estimate the relation between CEO inside debt and firm risk. Additionally, instrumental variable (IV-GMM) regressions are used to check the robustness of the results. Findings The results of this paper indicate that CEO inside debt is negatively associated with the measures of future risk. However, this negative association is influenced by market competition. Specifically, CEO inside debt results in lower levels of firm risk when market competition is high. When market competition is low, inside debt has no effect on firm risk. Additional results show that CEOs with large inside debt tend to decrease R&D investments and financial leverage and increase firm cash holdings and working capital only when market competition is high. Overall, these results suggest that market competition significantly influences the effect of CEO inside debt on corporate risk-taking by changing the strength of incentives from inside debt. Practical implications CEO inside debt could be used to provide incentives to CEOs to manage corporate risk-taking. Social implications The empirical results in this paper provide a practical tool to the boards of corporations to manage corporate risk-taking. The results suggest that boards can reduce excessive risk-taking by increasing the level of debt type compensation incentives. However, this strategy is effective only when market competition is high because in such markets inside debt provides the strongest incentives to reduce corporate risk. When competition is low, incentives from inside debt are ineffective in managing corporate risk-taking. Originality/value This is the first study that shows that the negative association between CEO inside debt and corporate risk-taking critically depends on the intensity of market competition.

TWO-WAY ENGAGEMENT BETWEEN EMPLOYEE AND EMPLOYER IN CORPORATE ACTIVITIES

The article examines the problem of motivation at the stage of corporate training and advanced training for the development of two-way engagement between employee and employer. The author points out that involvement required from two sides: on behalf of the employee to become more successful, to obtain a result that is objectively measured criteria - the level of wages or the receipt of financial incentives. Involvement on behalf of employer is searching of specific methods and tools, which together will lead to effective motivation of the employee. As the successful operation of such models in the field of material employees' remuneration the article considers foreign experience. Objective criterion - the comparison of wages of foreign countries and Russia allows to make a conclusion that Russia occupies a low position on the level of wages and material incentives is rarely used and is not flexible. In practice, the employer focused on the minimum wage, leaving the incentive part of the wages at their discretion. Thus, developing mechanisms using a model material incentives, the employer motivates employees and potential who have trained for involvement in the work and labour efficiency.

Post-Car World: data collection methods and response behavior in a multi-stage travel survey

The main research question addressed by this study is to what degree individuals would change travel modes, time allocation and activity patterns after experiencing large changes in generalized transportation costs and how they would react regarding their longer-term ownership in mobility tools, assessing suppressed demand effects from an activity-based perspective. The empirical basis is a multi-day travel and online diary that is required to obtain the personalized reference values for the later stated choice and stated adaptation tasks. This paper provides first detailed information of the survey methods, recruitment and fieldwork. An initial investigation of the data and its quality attributes, descriptions of the sampling structure and response behavior are presented. Participation choice models indicate that a high incentive level leads to a higher participation rate, but the net-effect on completing the survey is zero: once recruited, higher incentives also lead to a higher drop-out incidence. Certain socioeconomic characteristics are consistently overrepresented in the sample: season ticket ownership, better education and higher income strongly increase participation and completion of the survey. Findings reveal saliency effects, whereby response behavior is influenced by the respondents’ interest in the survey topic. While general fatigue effects can only be detected for the number of reported online activities, better educated and car-less respondents exhibit an increased reporting behavior of trips over time. Importantly, while showing no effects on completion of the survey, higher incentives tend to increase response quality in terms of absolute levels (trips) and stability (online activities).

Effectiveness and cost-effectiveness of a loyalty scheme for physical activity behaviour change maintenance: results from a cluster randomised controlled trial

BackgroundWe evaluated the effectiveness and cost-effectiveness of a loyalty scheme based intervention involving rewards for increasing physical activity in public sector employees.MethodsA cluster randomised wait-list controlled trial in public sector organisations in Northern Ireland. We randomly assigned clusters (1:1) using a computer generated random sequence. Researchers were masked to allocation, but participants were not. Employees aged 18–65 years with no self-reported medical contraindications to physical activity were included. The Physical Activity Loyalty Scheme (PAL) intervention was based on high-street loyalty cards where participants earned points for minutes of activity that could be redeemed for rewards, complemented by evidence-based behaviour change techniques. The primary outcome was objectively measured mean steps/day at 6 months using a validated pedometer (Yamax Digi-Walker CW-701) over 7 days, assessed with intention to treat analysis. Secondary outcomes included health, mental wellbeing, quality of life, work absenteeism and presenteeism, and use of healthcare resources. Cost-effectiveness, cost-benefit and mediation analyses were conducted. Trial registered with Current Controlled Trials, number ISRCTN17975376.ResultsBetween September 2014 and October 2015, we recruited and randomly assigned 37 clusters (from nine organisations; mean clusters per organisation = four) and 853 participants to the intervention (n = 19 with 457 participants) or control group (n = 18 with 396 participants). Primary outcome data were available for 249 (54·4%) intervention and 236 (59·6%) control participants. Mean steps/day were significantly lower in the intervention vs control group (adjusted mean difference = − 336, 95% CI: -612 to − 60, p = 0·02) at 6 months. Participants redeemed only 39% (SD 43%) of their earned points. Using the Quality Adjusted Life Year outcome, the intervention was not cost effective from an NHS/PSS perspective. A net cost analysis from an employer perspective demonstrated the intervention group was associated with a mean of 2·97 h less absenteeism over a 4 week period (p = 0·62), which could result in net savings ranging from £66 to £735 depending on the wage rate employed. At 4-weeks post-baseline there were significant increases in identified regulation, integrated regulation, intrinsic motivation, social norms and intentions in intervention compared to control participants.ConclusionsOur mixed results pose challenges that are too infrequently exposed in public heath intervention trials. Although the intervention successfully altered several hypothesised mediating constructs it did not translate into long-term behaviour change. Our incentive level may have been too low to incentivise change, despite being designed a priori by a Contingent Valuation Survey. There were also major re-structuring of several organisations which presented significant implementation challenges, and technical limitations.Trial registrationISRCTN17975376 (Registered 19/09/2014).

A frontier-based system of incentives for units in organisations with varying degrees of decentralisation

The paper focuses on hierarchically structured organisations with a large set of operating units. While the central body in such organisations faces asymmetry of information concerning the operating costs of the units, it may wish to incentivise them through benchmarking and target setting to operate as efficiently as possible. If a standard Data Envelopment Analysis (DEA) approach is used for this purpose, each operating unit could estimate its own efficient targets. However, this decentralised scenario is not necessarily appropriate for a centralised organisation in which a central body wishes to optimise the performance of the system of units as a whole. On the other hand, a top-down imposed set of targets is often not suitable as they would be too demanding for some units and too lax for others. This paper proposes a DEA-based approach for incentivising the units of a hierarchically structured organisation in order to optimise the performance of the units collectively while at the same time the targets are not too demanding for inefficient units. The proposed approach is also extended so that incentive levels for operating units are determined over time, taking into account any changes in their productivity. Accordingly, the central management can strike a balance between not spending too much on incentives on the one hand and encouraging the operating units to reveal their true cost function on the other. We illustrate our approach using data from a set of German savings banks.

Effectiveness and cost-effectiveness of a loyalty scheme for physical activity behaviour change maintenance: a cluster randomised controlled trial

BackgroundThe workplace is ideal to encourage habitual physical activity, but little evidence exists on effective behaviour change interventions that lead to sustained behaviour. We aimed to address this gap by evaluating the effectiveness and cost-effectiveness of a loyalty-based intervention on physical activity in public sector employees. MethodsWe conducted a cluster randomised wait-list controlled trial in public sector organisations in Northern Ireland, UK. We randomly assigned clusters (1:1) using a computer-generated random sequence. Researchers were masked to allocation, but participants were not. Employees aged 18–65 years with no medical contraindications to physical activity were included. The Physical Activity Loyalty scheme intervention was based on high-street loyalty cards where participants earned points for minutes of activity (monitored via remote sensing) that could be redeemed for rewards (1 min=about £0·03), complemented by evidence-based behaviour change techniques. The primary outcome was objectively measured mean steps per day at 6 months using a validated pedometer (Digi-Walker CW-701, Yamax, Japan) measured during 7 days, assessed with intention-to-treat analysis. Secondary outcomes used for economic analyses, nested within the study, included self-reported health, mental wellbeing, quality of life, work absenteeism and presenteeism, and use of health-care resources. Cost-effectiveness, cost-benefit, and mediation analyses were conducted. This trial is registered with the ISRCTN Registry, number ISRCTN17975376. FindingsBetween Sept 1, 2014, and Oct 31, 2015, we recruited and randomly assigned 37 clusters and 853 participants (71% female, mean age 43·6 years [SD 9·6]) to the intervention (19 clusters, 457 participants) or control group (18, 396). Primary outcome data were available for 249 (54·4%) intervention and 236 (59·6%) control participants. Mean steps per day were significantly lower in the intervention group at 6 months (adjusted mean difference −336, 95% CI −612 to −60; p=0·02). The intervention was not cost-effective. There was a 60% probability of the intervention being cost-saving from an employer's perspective arising from reduced absenteeism. InterpretationOur mixed results pose challenges that are too infrequently exposed in public heath intervention trials. Our incentive level might have been too low to incentivise change, even though it was designed a priori by a contingent valuation survey. Also, major re-structuring of several organisations presented substantial implementation challenges. FundingNational Institute for Health Research Public Health Research (PHR) Programme.

EFEKTIVITAS PENGGUNAAN MODEL PEMBELAJARAN DISCOVERY LEARNING TERHADAP HASIL BELAJAR MAHASISWA MATA KULIAH KALKULUS PEUBAH BANYAK

Abstract. Student activity will affect effectiveness for student learning outcomes. The effectiveness of learning consists of four indicators, namely the quality of instruction, the suitability appropriate level of instruction, incentive, and time. The purpose of this study is to: (1) Know how the effectiveness of student learning outcomes in variable calculus subjects after getting learning with discovery learning learning models. (2) Knowing whether there is an increase in student learning outcomes in many variable calculus subjects after getting learning with discovery learning learning models. The data analysis techniques are carried out from the data description test stage, then the prerequisite test is the normality and linearity test, then test the hypothesis. The steps in the study are as follows: (1) The researcher provides a stimulus for the sample class, namely the discovery learning model; (2) At the time of the learning process the partner lecturers see the activity, student learning; (3) Provide essay tests to see the level of success of students in learning; (4) Perform statistical tests to see the effectiveness of student learning outcomes using discovery learning learning models. The results of this study are that there is an effect on the effectiveness of mathematics learning using the discovery learning model of student learning outcomes in many variable calculus subjects, and there is an increase in student learning outcomes after learning with discovery learning models of many variable calculus subjects as much as 20.53.Keywords: Discovery Learning, Learning Outcomes, Calculus

The effect of executive incentives on FDI ambidexterity

PurposeThis paper aims to examine different hypotheses concerning the effects of executive incentive on the degree of Chinese foreign direct investment (FDI) ambidexterity. Specifically, this study provides new insights on how executive equity incentive and executive control right incentive may affect overseas ambidextrous strategy of Chinese enterprises.Design/methodology/approachThis study used panel data of Chinese manufacturing listed companies in 2006-2015 to explore the relationships between related factors. Hypotheses are tested by using regression analysis.FindingsThis study found that executive equity incentive is positively related to the degree of FDI ambidexterity. It also found that the level at which control right incentives of executive are made has a curvilinear relationship with degree of FDI ambidexterity. Higher level of control right incentive of executive will be associated with higher degree of FDI ambidexterity; however, beyond some level, higher control right incentive of executive will be associated with lower degree of FDI ambidexterity.Research limitations/implicationsThis paper has implications to future research and companies’ everyday practice on ambidextrous FDI strategy.Originality/valueBased on the principal-agent framework and incentive theory, this paper offers an interesting insight of achieving balance of ambidextrous strategy for Chinese multinational enterprises by involving the different roles of executive equity incentive and executive control right incentive they played.

PabloYanguasWhy We Lie About AidLondon: Zed Books, 2018. 275 p.

Development aid is so riddled with contradictions, controversies, equivocation, and hypocrisy that almost any critique, left or right, is welcome—as is this one. The basic argument presented here is that development is a transformational process that requires institutional change. As such, it creates winners and losers. Therefore, only a political understanding of the development process and an approach to supporting it rooted in political analysis can achieve desired change. The author offers his own understanding of how such an approach, which he styles “contentious development politics,” should be designed. Foreign aid is a political football in donor countries, instrumentalized by political forces to project their values and priorities. The usual fracture is between a conservative view that aid is a disincentivizing boondoggle and a progressive one that it is a moral imperative that can deliver tangible results for both donor and beneficiary. Some implications are straightforward and obvious: the Americans are big on private sector development and civil society, the Swedes on gender equality, the Danes on human rights, for example. But there are aberrations: on the right, for example, President George W. Bush's PEPFAR (President's Emergency Program for AIDS Relief) and the catalyst that that conservative president provided for the Millennium Development Goals in Monterrey in 1999. Caught up in the political winds of development assistance is the aid establishment, whose members depend for a living on the fiscal largesse and ideological stance of donor governments. But the fact that aid is used to pursue favored political objectives or please selected political constituencies is not the main point of the book. The main point is that the implementation of aid programs and projects has become dominated by (Tony) Blairite New Public Management or, to use the author's preferred term, Value for Money (VfM). The VfM hydra has many heads, but prominent among them are logical frameworks (“logframes”), theories of change, SMART (Specific Measurable Assignable Realistic Time-related) indicators, Results-oriented Monitoring (RoM), randomized control trials (RCTs), “lessons learnt,” etc. Taken as a whole, these are supposed to promote a culture of tracking whether and why assistance, translated into actions, translated into results, translated into tangible beneficial impacts on target populations—or did not, as the case may be. The problem, the author argues, is that fetishization of efficiency along these lines— John Foster Dulles called it “bang for the buck” in the nuclear strategic context, and the phrase travels well—distorts aid in the direction of interventions with quantifiable bang (and, the author might have added, good photo ops for the Ambassador and funding agency representatives). More transformational, long-term, long-shot, interventions—say in rule of law or democratic governance or conflict prevention or gender or civil society strengthening; where an entire way of life is being interrogated—are underfunded unless there is a tight security sector link. The argument is supported by credible, in-depth case studies on Sierra Leone, Liberia, and Honduras. The symbiotic relationship between aid providers and recipients is analyzed, yet somehow lacking in the analysis is global realpolitik: the money has to flow. It has to flow to strengthen strategic relations between donor and recipient countries. It has to flow to support an important client class. The theme of subalternity is never pursued in depth and that most overused word in the aid world, “partnership,” is never really queried, although the author is well positioned to do both. Despite his experience treading the halls of major development agencies, the author never quite comes to grips with the micro-experience of the program officer, tasked with pushing massive amounts of money out the door under time pressure and the exquisite scrutiny of auditors, evaluators, politicians, and civil society organizations. It is only at the level of individual incentives that the question why we lie about aid is best engaged. So, some critical opportunities were missed. But that said, the book is well written, informative, and entertaining. Its strongest point is that the author, a researcher at the University of Manchester, is also an experienced consultant to aid agencies, giving him a perceptive combined town-and-gown perspective. Bibliography; index.

Moulin mechanism design for freight consolidation

In freight consolidation, a “fair” cost allocation scheme is critical for forming and sustaining horizontal cooperation that leads to reduced transportation cost. We study a cost-sharing problem in a freight consolidation system with one consolidation center and a common destination. In particular, we design a mechanism that collects bids from a set of suppliers, and then decides whose demand to ship via the consolidation center and the corresponding cost shares. We use the Moulin mechanism framework to design a truthful mechanism for the cost-sharing problem, and study the mechanism’s budget-balance guarantee and economic efficiency. We find that it is generally not possible to obtain a simultaneously truthful and budget-balanced Moulin mechanism under the transportation cost structure we study. For our proposed mechanism, there exists a trade-off between the budget-balance guarantee and the level of incentives that can be given to large suppliers. Additionally, the mechanism has better economic efficiency when there are more bidding suppliers or the destination is farther away. In our setting, either the consolidation center or the suppliers need to be subsidized. The parameters that determine the trade-off between the consolidation center’s benefit and suppliers’ cost savings should be set based on the specific goals of the consolidation center. Encouraging more suppliers to bid helps to increase the overall social welfare.

Managerial equity incentives and anti-dilutive convertible debt decisions

PurposeThis paper aims to examine whether high equity incentives motivate executives to avoid issuing convertible debt and/or to design convertible debt issues as anti-dilutive to earnings-per-share (EPS).Design/methodology/approachTests are conducted using the Heckman two-step probit model to control for potential self-selection bias between firms that issue straight debt and those that issue convertible debt. Further, analyses are conducted separately and jointly for the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) to assess the differential impact of CEOs’ and CFOs’ equity incentives on convertible debt issuance and design decisions.FindingsFirms are more likely to design convertible debt issues as anti-dilutive to EPS when CFOs have high levels of equity incentives, but only when the firm stock price is sensitive to diluted EPS. High CEOs’ equity incentives have limited impact of convertible debt issuance and design decisions.Research limitations/implicationsThe main limitation of this study is the generalizability of the findings and implications of this study due to the smaller sample size of convertible debt issues.Originality/valuePrior research has shown that bonus incentives influence CEOs with disincentive for EPS dilution and motivate them to make anti-dilutive financing decisions. Further, there is evidence that high equity incentives motivate CEOs to manage earnings to boost short-term prices. This study extends prior literature by showing that high equity incentives provide executives with disincentive for EPS dilution and motivate CFOs to design convertible debt issues as anti-dilutive to EPS possibly to avoid reduced stock prices. Further, this study shows that CFOs have greater influence over convertible debt design choices than CEOs do.

Can Risk-Taking Incentives Increase Work-Effort?

In a principal-agent setting, offering maximum levels of incentives, i.e., the compensation is completely variable, is far from optimal because this reduces the principal`s profits, and because the risk-aversion nature from the agent matters. In this paper, we hypothesize that an incentivized agents’ risk-taking about the composition of their own wage structure can offset the typical risk-aversion, and thus lead to an increase in performance. Using a reframed version of the gift-exchange game workers decide, before their effort choice, how much of their wage is variable and fixed. The variable component is limited to max. 30% of the initial wage offer (the rest remains fixed) and it increases/decreases with effort and also with a random factor. We find that risk-averse workers exposed ¾ of their variable component to risk, and outperformed a control group (fixed wage scheme) by half in effort levels. This increase in effort is positively correlated to their risk-distributional preferences. Theoretical explanations (supported by data) are discussed.

Effects of Financial Incentives on Saving Outcomes and Material Well‐Being: Evidence From a Randomized Controlled Trial in Uganda

The use of savings products to promote financial inclusion has increasingly become a policy priority across sub-Saharan Africa, yet little is known about how families respond to varying levels of savings incentives and whether the promotion of incentivized savings in low-resource settings may encourage households to restrict expenditures on basic needs. Using data from a randomized controlled trial in Uganda, we examine: 1) whether low-income households enrolled in an economic-empowerment intervention consisting of matched savings, workshops, and mentorship reduced spending on basic needs and 2) how varied levels of matching contributions affected household savings and consumption behavior. We compared primary school-attending AIDS-affected children (N = 1,383) randomized to a control condition with two intervention arms with differing savings-match incentives: 1:1 (Bridges) and 1:2 (Bridges PLUS). We found that: 1) 24 months post-intervention initiation, children in Bridges and Bridges PLUS were more likely to have accumulated savings than children in the control condition; 2) higher match incentives (Bridges PLUS) led to higher deposit frequency but not higher savings in the bank; 3) intervention participation did not result in material hardship; and 4) in both intervention arms, participating families were more likely to start a family business and diversify their assets.

A novel behavioral real time pricing scheme for the active energy consumers’ participation in emerging flexibility markets

Abstract Liberalized electricity markets, smart grids and high penetration of Renewable Energy Sources necessitate the development of novel pricing schemes able to manage energy consumption (energy efficiency services) and harmonize unpredictable/volatile production with ad-hoc consumption (flexibility services). As a result, Energy Service Providers can considerably lower the cost of energy they purchase from the wholesale market and create new revenue streams, while offering consumers lower electricity bills and digital services via online software platforms. Price-based Demand Side Management techniques can trigger the desired behavioral changes and generate novel services and business models for the Energy Service Provider’s participation in congestion, balancing, and other emerging flexibility markets. The energy pricing schemes proposed so far, do not strongly motivate consumers to modify their electricity consumption habits, as they are unfair and thus unable to effectively trigger behavioral changes and offer flexibility services. Based on this observation, we develop a Behavioral Real Time Pricing scheme, which offers an easily adjustable level of financial incentives to consumers, by fairly rewarding the desirable behavioral electricity consumption changes. Performance evaluation results demonstrate that the proposed billing scheme affects the consumers’ behavior much more efficiently than the traditional Real Time Pricing mechanism, outperforming the latter in all widely adopted metrics. Our billing mechanism is able to simultaneously: (i) significantly reduce energy cost compared with Real Time Pricing (10%–30%), (ii) slightly increase consumers’ welfare (2%–4%) and (iii) ensure the fair allocation of financial benefits among the consumers. All these result in significantly increased competitiveness of our billing mechanism in the flexibility markets.