PROMOTIONS AS WORK INCENTIVES

Why do professional partnerships like law firms, accounting practices, and management consulting groups to name a few, rely almost exclusively on promotions for incentives and do not typically use incentive pay to motivate their associates? We compare three schemes (relative-input-based piece rates, tournaments with monetary prizes, and tournaments with promotions as prizes) within an environment characterized by group production and double moral hazard induced by possible wealth constraints on the supervisors. We find that the difficulty in implementing promotion tournaments is possibly an important reason for the existence of firms.     

The non-monetary quality of city life in South Africa

In contrast to most research on the non-monetary quality of life, which relies on subjective indicators, we construct objective measures of the non-monetary quality of life using regression methods, for South Africa's cities. We also analyse the extent to which the various cities have been able to turn improvements in per capita incomes (monetary quality of life) into non-monetary quality of life – as reflected for instance in a better environment, higher literacy and longer lives. When monetary quality of life measures are used for South Africa's cities, the ranking in 2004 was led by Johannesburg, Tshwane, Ekurhuleni, Cape Town, Durban and Port Elizabeth. However when residuals from a regression of per capita income on (HDI) are used as a measure of non-monetary quality of life (i.e. the proportion of HDI not explained by variation in incomes), coastal cities tend to obtain generally higher rankings, with Cape Town ranked first, followed by Ekurhuleni, Durban, Port Elizabeth and then Johannesburg and Tshwane.     

Misestimating Betting Behavior: The Role of Negative Asymmetries in Emotional Self Prediction

This paper addresses the role of negative asymmetries in emotional self-prediction by looking at the extent to which individuals misestimate their own betting behavior in sequential gambles. In a series of three experimental studies, we demonstrate that losses lead to higher than planned bets whereas bets are on average carried over after gains. Such asymmetric deviations from the plan emerge (1) when monetary and non-monetary incentives are used, and (2) when participants face fair and unfair gambles. The asymmetry is based on people’s inability to predict how much the negative emotions generated by a bad experience (e.g. the loss) will influence them to put more effort (e.g. bet more) than planned in an attempt to re-establish a homeostatic state in the prospect of a good experience (e.g. winning).     

Hitting the jackpot: the influence of monetary payout on gambling behaviour

Restrictions on monetary payout may promote player engagement in gambling as a form of entertainment rather than as a source of income. Our objective was to evaluate the effects of monetary prize magnitude upon gambling behaviour in a community sample, and the degree to which this association is moderated by gambling risk factors. One hundred and eighty-seven adults completed an online survey assessing motivation, impulsivity and affect. Participants were given a series of vignettes and asked to estimate how much they would gamble to win monetary prizes of increasing amounts with and without accrued gambling debt. Participants reported increased gambling in response to increased monetary payout. Debt moderated these outcomes, such that electronic gaming machine (EGM) and lottery expenditures and number of lottery games played decreased with increased debt; this effect was most pronounced at elevated monetary prizes. The association between duration of EGM play and monetary payout was moderated by gender only. Results suggest that self-reported gambling behaviours increased with monetary payout even across qualitatively different gambling products, and across gamblers with different motivations for gambling, levels of impulsivity, and negative affect. The restriction of monetary payouts warrants further research attention as a form of problem gambling prevention.     

CHARITIES, NO; LOTTERIES, NO; CASH, YES: MAIN EFFECTS AND INTERACTIONS IN A CANADIAN INCENTIVES EXPERIMENT

The effects on response rates to mail surveys of prepaymentcash incentives, charitable donations, and the chance to wina lottery prize are examined in a true experimental design.A survey on environmental issues was conducted during the fallof 1994 among 3,088 households drawn from the Grand River watershedregion of southwestern Ontario, Canada. The 20-cell incentivesexperiment crossed three levels of prepaid monetary cash incentive($2, $5, and $10) with a control group (no cash incentive),plus the offer to make a charitable donation ranging from $2to $10 on behalf of the respondent, or participation in a lotteryfor prizes of $200. The overall response rate to the survey,with three follow-ups, was 70.7 percent with the effects ofthe prepaid cash rewards demonstrated, but not those for thelottery or charitable donations. Logistic regression analysisof response rate supports a main effects model for cash incentivesbut does not support either of two alternative models for maineffects of the lottery and charitable donations or interactions.Further analysis demonstrates a pattern of earlier responseas a result of prepaid incentives. The findings are discussedin terms of their cost-benefit implications and with respectto conceptualizations of respondents' motives for completingmail questionnaires.     

The Convergence of Gambling and Digital Media: Implications for Gambling in Young People

Adolescents’ use of the Internet and other digital media for the purpose of gambling represents a serious concern in modern society. This paper overviews some of the available monetary and non-monetary forms of gambling within new digital and online media and monetary forms of games with gambling-like experiences. With reference to current psychological knowledge on the risk factors that promote adolescent gambling, it is suggested that new gambling technologies may: (a) make gambling more accessible and attractive to young people, (b) may promote factually incorrect information about gambling, (c) provide an easy escape from real world problems such as depression and social isolation, (d) create a gambling environment that easily facilitates peer pressures to gamble, (e) ease parental transmission of gambling attitudes and beliefs, and (f) make gambling more ubiquitous and socially acceptable. The unique risks of Internet gambling for young people are critically discussed, as well as the lack of restricted classification for video games and other media that feature interactive, non-monetary forms of gambling.     

Donating-selling tradeoffs and the influence of leaders in the environmental goods game

Contributions to environmental goods are motivated by both pecuniary incentives and environmental consciousness. Public policy often uses financial incentives to encourage contributions. However, individuals often donate their time or money to the environmental cause without such incentives. The purpose of this paper is: (a) to examine the relationship between “donating” (without monetary incentives) and “selling” behavior (motivated by monetary incentives) of individuals in the context of environmental protection and (b) to analyze the influence of a leader on individual contributions to the environmental good. The major results are: (1) there is a tradeoff/substitution between donating and selling for a given level of incentives; (2) donating is much less sensitive to changes in monetary incentives and, furthermore, there is no evidence that the increase in financial incentives to sell will crowd out donations; (3) the changes in contributions by leaders have a significant impact on followers’ behavior.     

Public policies on water provision and early childhood education and care (ECEC): do they reduce and redistribute unpaid work?

Governments need to provide public finance to support services to reduce and redistribute unpaid work. However, while the financial costs of the required public investment are up front and highly visible; the (many) benefits are diffuse, spread over time, and include non-monetary as well as monetary benefits. This article focuses on two experiences from developing countries, in the water sector in Tanzania and early education and child care in Mexico and Chile. These experiences provide us with evidence of impact, enabling activists and policymakers to develop analysis to use in advocacy and policy formulation, including the modes of provision that are more likely to ensure equitable outcomes.     

DETERMINANTS OF VOLUNTARY OVERTIME DECISIONS

This paper develops and estimates a model of the labor supply for overtime work when some workers' choices are constrained by mandatory overtime provisions of employers. Economic incentives are shown to have a significant effect on workers' overtime decisions. Policy simulations suggest that an increase in the overtime premium would lead to greater voluntary overtime work, as would a lowering of the level of weekly hours after which the mandatory premium takes effect. The estimated effects of these changes are not quantitatively large, indicating that workers are fairly insensitive to changes in monetary incentives in making overtime decisions.     

Divorce and the duality of marital payoff

Empirical studies on the determinants of divorce are scarce in economics. The literature has focused on the impact of income differentials between partners. We extend the model of marital dissolution to integrate time-varying non-pecuniary quality of the match. We use a unique Russian dataset to measure shocks to the non-economic components of the value of marriage. Our estimates suggest that the monetary and non-monetary components enter additively into marriage surplus, but with gender-specific marginal rates of substitution: divorce hazard is more sensitive to the non-pecuniary dissatisfaction of the wife than to that of the husband; impacts of the monetary components are also gender-specific and highly non-linear. We link these findings to remarriage prospects and partial risk sharing.     

Expressing Gambling-Related Cognitive Biases in Motor Behaviour: Rolling Dice to Win Prizes

Cognitive perspectives on gambling propose that biased thinking plays a significant role in sustaining gambling participation and, in vulnerable individuals, gambling problems. One prominent set of cognitive biases include illusions of control involving beliefs that it is possible to influence random gaming events. Sociologists have reported that (some) gamblers believe that it is possible to throw dice in different ways to achieve gaming outcomes (e.g., ‘dice-setting’ in craps). However, experimental demonstrations of these phenomena are lacking. Here, we asked regular gamblers to roll a computer-simulated, but fair, 6 sided die for monetary prizes. Gamblers allowed the die to roll for longer when attempting to win higher value bets, and when attempting to hit high winning numbers. This behaviour was exaggerated in gamblers motivated to keep gambling following the experience of almost-winning in gambling games. These results suggest that gambling cognitive biases find expression in the motor behaviour of rolling dice for monetary prizes, possibly reflecting embodied substrates.     

Monetary incentives in support of academic achievement: results of a randomized field trial involving high-achieving, low-resource, ethnically diverse urban adolescents

Significant resources have been directed at understanding and alleviating the achievement gap in education. Most programs focused on this aim rely on a top-down approach, including funding for infrastructure improvement, curriculum development, class size, and teacher salaries. This article presents findings from a randomized field trial that evaluates a bottom-up approach in which high-achieving students of diverse racial and ethnic backgrounds from poor families are given monetary incentives to maintain their academic standing. The evaluation was designed to explore the role of monetary incentives as a mechanism for promoting resiliency in the face of poverty-related challenge. Discussion of what motivates students to learn is framed as a function of normal cognitive and socioemotional development in challenging environments. Evaluation findings indicate that monetary incentives are effective in promoting academic success to different degrees and for different reasons depending on students' perception of the meaning of the incentive in relation to their emergent identity.     

Goal-oriented agents in a market

We consider a market where “standard” risk-neutral agents coexist with “goal-oriented” agents who, in addition to the expected income, seek a high-enough monetary payoff (the “trigger”) to fulfill a goal. We analyze a two-sided one-to-one matching model where the matching between principals and agents and incentive contracts are endogenous. In any equilibrium contract, goal-oriented agents are matched with the principals with best projects and receive the trigger with positive probability. Moreover, goal and monetary incentives are complementary: goal-oriented agents receive stronger monetary incentives. Finally, we discuss policy interventions in relevant environments.     

Bourdieu, Smith and disinterested judgement

The paper presents a sympathetic critique of Bourdieu7rsquo;s work in terms of the tension between its critical intentions and its leanings towards sociological reductionism. Although Bourdieu argues against such reductionism in his methodological pronouncements, his empirical studies tend to reduce actors' putative disinterested judgements to functions of their habitus in relation to the social field and to unconscious strategies of distinction. Further, his concept of (non-monetary) forms of capital occludes the difference between use-value and exchange-value and the corresponding distinction between the pursuit of goods and the pursuit of distinction, which are vital for both explanation and critique. Moreover his suspicion of normative judgement on the part of social science and his concealment of his own normative standpoint subvert his critiques. Thus in relation to Bourdieu's analysis of the role of mis-recognition in social life I argue that this requires a delineation of the extent of justified recognition. In developing the argument I draw upon Adam Smith's analysis of moral sentiments and his critique of undeserved recognition and the pursuit of distinction. Where Bourdieu is dismissive about moral issues, Smith treats moral sentiments as irreducible to interest or instrumental action and as a significant element in the reproduction of social order. The paper concludes with some implications for the nature of critique in social theory.     

Freedom to veto

Several sets of axioms have been proposed to characterize rankings of opportunity sets in terms of freedom of choice. In these models it has been assumed that being in a position to choose from more options is preferred to having fewer options. We tested the empirical validity of that assumption experimentally. Combining a dictator game (a no-choice situation for the receiver) and an ultimatum game (the receiver can choose between two options) we investigated whether receivers prefer to have some freedom of choice (in the ultimatum game) over having no freedom of choice (in the dictator game) even in the presence of monetary incentives to choose otherwise. The experimental results show that a strong majority of players is not willing to give up the option to veto without monetary incentives to do so. However, players are often willing to trade their freedom to veto even for a small bonus. The higher the monetary incentives the more players give up their veto power.     

A “Nutcracker” Theory of Modern Organizations: A Conflict View

Abstract

This paper presents a point of view toward formal organizations which departs from the equilibrium models contained on both bureaucratic and open system theory. Specifically, a conflict perspective is taken in terms of which organization disequilibrium is understood to be typical of organizations as a consequence of their being continually subject to the threat of withdrawal of monetary and non-monetary supports from both internal members and external publics with which organizations are interdependent. The factors contributing to these circumstances of conflict are attributed to recent maturations of rights of citizenship and participatory democracy, the social organization of these sources of conflict are termed the “nutcracker” effect.     

Can work and training programs reform welfare?

Over the past thirty years the number of Americans on welfare has increased by 460 percent, generating concern about both the monetary and social costs involved. Long-term welfare dependence produces adverse outcomes for many families by distorting incentives for work and marriage. Government programs to reduce welfare have focused on work and training programs to raise the skills of welfare recipients, but these programs have not significantly reduced welfare participation. Policies to scale back welfare are essential for reducing welfare disincentives. New approaches to the delivery of education are viewed as an important preventive strategy.     

Exploitation aversion: When financial incentives fail to motivate agents

Studies of the principal-agent relationship find that monetary incentives work in many instances but that they can also backfire. Various mechanisms for this failure have been examined (e.g., intrinsic motivation, image concerns). We posit that an aversion to being exploited, i.e., being used instrumentally for another’s benefit, can also cause incentives to fail. Using an experiment we find that compliance is lower for exploitative principals compared to neutral ones despite using the same contracts. To corroborate our results we show that surveyed “exploitation aversion” mediates this effect. Our results have implications for the design and implementation of incentives within organizations.     

Loyalty programmes in the gambling industry: potentials for harm and possibilities for harm-minimization

The field of gambling studies has been remarkably silent on loyalty programmes in the gambling industry. This article reviews the scant empirical literature, with an aim to stimulate discussion and research about the impact of loyalty programme membership on players. Preliminary evidence suggests that disordered gamblers are more apt to join a loyalty programme and be disproportionately rewarded (due to the amount of money they spend gambling) relative to recreational and at-risk gamblers. As such, loyalty programmes in the gambling industry may generate harms in vulnerable individuals. However, loyalty programmes may also be well positioned to facilitate harm-minimization by promoting behavioural tracking that is collected on every member – information that can be provided to players to advance responsible gambling. Additionally, members could be rewarded for engagement with responsible gambling tools, which may increase the currently low rate of tool use. That said, structuring loyalty programmes to reward the use of responsible gambling instruments with time on device or even non-monetary prizes may be incompatible with harm-minimization efforts. There exists a need for empirical research on the antecedents and consequences of loyalty programme membership as well as the possibility that loyalty programmes have some responsibility gambling utility.     

Incentives for Increasing Return Rates: Magnitude Levels, Response Bias, amd Format

The use of monetary incentives has been shown to significantlyincrease response rate. However, previous investigations haverarely investigated the effects of incentives greater than $1,compared different magnitudes of incentives, or investigatedresponse bias due to incentives. The current study also investigatedthe utility of an Answer Check. Results suggest that monetaryincentives increase response rate, larger incentives do notnecessarily further increase survey response, incentives donot appear to bias responses, and the Answer Check does notfacilitate response rate.