The plural roots of rewards: awards and incentives in Aquinas and Genovesi

Abstract

In this economic debate, incentives (material, extrinsic) and awards (symbolic, intrinsic) are conceived as two opposite tools to prompt human actions. In this article, we provide a historical argument to problematise this opposition. We investigate the idea of prizes (“premi”) in the works of civil economist Antonio Genovesi, and its seeds in Thomas Aquinas’ thought. They both discuss if material rewards can crowd-in intrinsic motivations. Aquinas considered the crowding-out risks related to honour (award). Genovesi stressed the role of private prizes (incentives) and market in fostering the development of society, and claims that crowding-in is more common than crowding-out.     

An educational loan repayment program for registered nurses

A state-sponsored loan repayment program offers nurse executives a unique and highly effective recruitment and retention strategy while providing financial assistance to professional nurses repaying educational loans.     

Developing an incentive program for home health nurses

After revamping agency operations, this agency was able to devise a voluntary incentive bonus program to address recruitment, retention, and quality concerns while controlling costs.     

Evaluation of a peer support program for staff nurses

IMPACT (Interactional Meetings--Peers Working And Caring Together) is a task-oriented, voluntary, peer-support program for staff nurses. Evaluation data suggest the program is a cost-effective method for developing and retaining nurses in the hospital.     

Litigation,liability, and incentives for care

In this paper, potential injurers are subject to a negligence standard and differ in cost of taking care; in the event of accident, the injurer's degree of care is private information in litigation that follows. Award of damages for pain and suffering will lead to a general increase in care and hence reduce the likehood of accident. A tighter negligence standard will lead some potential injurers to take more care and others to take less. Adoption of a rule under which the loser at trial must pay the litigation costs of the winner will reduce the pressure for punitive damages.     

The preference reversal phenomenon: Response mode,markets and incentives

Summary This paper addresses the apparent conflict between the results of experiments on individual choice and judgement and the results of market experiments. Data are reported for experiments designed to analyze the effects of (a) economic incentives, repetition, feedback and information and (b) choice and valuation response modes on (c) subjects' decisions in paired market and nonmarket environments. Causes of divergent market and nonmarket behavior are identified in the context of the preference reversal phenomenon (PRP). Study of the PRP is extended to two types of market environments. The PRP is observed on the first repetition in a market setting (second price auction) with immediate feedback, both with and without financial incentives. However, after five repetitions of the auction, the subjects' bids are generally consistent with their choices and the asymmetry between the rates of predicted and unpredicted reversals disappears. An individual pricing task using the BDM mechanism yields similar results on the first repetition but results which differ from the second price auction on the fifth repetition. Choice tasks produce lower rates of reversals than do pricing tasks in both market and individual decision making settings.We are grateful for financial support from the National Science Foundation (grant no. SES-8820552) and the California Institute of Technology. Research facilities were provided by the Economic Science Laboratory at the University of Arizona. Valuable computer programming was provided by Sean Coates and Shawn LaMaster. We thank Professor Jeffrey Dubin for his help in setting up the software for the generalized Tobit model, and Professors Joyce Berg, Graham Loomes, and Charles R. Plott for helpful comments.     

The Bridge to Practice Model: a collaborative program designed for clinical experiences in baccalaureate nursing

The Bridge to Practice Model provides undergraduate nursing students with continuity in medical-surgical education through placement in the same hospital for all medical-surgical clinical rotations. Hospitals that participate in the bridge model provide senior clinical nurse preceptors whose time is paid for by the university. The university provides an on-site nurse faculty member who works with nursing education to coordinate all clinical groups. Institutional continuity and university/hospital collaboration result in less orientation time for students and faculty, more involvement with clinical support services and care management, and more informed employment choices by senior students. Challenges include recruitment of interested senior clinical nurses, retention of clinical liaison faculty, and management of the trade-off between institutional stability offered by clinical site continuity and the variety of experiences offered by rotation across several clinical settings.     

Outcomes of a career planning and development program for registered nurses

The impact of a career planning and development program (CPDP) for registered nurses (RNs) on nurse and system outcomes was examined. The CPDP was effective as participants were able to create a career vision and individualized career plan.     

Equality,equity and incentives: An experiment

We study a fundamental conflict in economic decision-making, the trade-off between equality, equity and incentives, in a new experimental game that nests a voluntary contributions mechanism in a broader spectrum of incentive schemes. In a 2×2 design, we let subjects either vote on or exogenously encounter incentive settings while assigned unequal endowments are either task-determined or random. We find that earned endowments lead to less support for redistribution and less cooperation. Subjects' voting is influenced by egalitarian and equity concerns, in addition to self-interest. Cooperation rates respond rather continuously to incentives.     

Renegotiation-proof contracting, disclosure, and incentives for efficient investment

Disclosure by firms would seem to reduce investment inefficiency by reducing informational asymmetry. However, the impact of disclosure is endogenous and depends on incentives within the firm. Given optimal renegotiation-proof contracts, disclosing only accepted contracts does not solve the Myers-Majluf problem. What solves the problem is having either full transparency of all compensation negotiations or, more reasonably, additional forward-looking announcements. The model is robust to renegotiation in equilibrium, the order of moves, and moral hazard. The analysis illuminates disclosure regulation: forward-looking disclosure is beneficial when the manager's contract is optimal and induces truth-telling.     

Cost incentives for doctors: A double-edged sword

If doctors take the costs of treatment into account when prescribing medication, their objectives differ from their patients' objectives because the patients are insured. This misalignment of interests hampers communication between patient and doctor. Giving cost incentives to doctors increases welfare if (i) the doctor's examination technology is sufficiently good or (ii) (marginal) costs of treatment are high enough. If the planner can costlessly choose the extent to which doctors take costs into account, he will opt for less than 100%. Optimal health care systems should implement different degrees of cost incentives depending on type of disease and/or doctor.     

Infrastructures, incentives, and institutions: Fostering distributed knowledge bases for the learning society

While much attention has been devoted to information and communication technologies, a more fundamental change at the start of the new millennium is the increasing importance of innovation for economic prosperity and the emergence of a learning society. The analysis in this paper shows that innovation should be understood as a broad social and economic activity: it should transcend any specific technology, even if revolutionary, and should be tied to attitudes and behaviors oriented towards the exploitation of change by adding value.We build on the idea of inclusive learning, which entails a process of shared prosperity across the globe following local specific conditions, and argue that it is crucial to understand the features of knowledge-induced growth in rich countries, as well as the challenges and opportunities for late-industrialized and less-developed countries. To achieve these objectives, we emphasize the relative importance of infrastructures and incentives, but considering the increasingly important role of institutions towards the development of social capital. This is because learning societies will increasingly rely on “distributed knowledge bases” as a systematically coherent set of knowledge maintained across an economically and/or socially integrated set of agents and institutions.This broad concept has motivated the work behind the present paper, which builds on material presented at the 5th International Conference on Technology Policy and Innovation (ICTPI), which was held in Delft, The Netherlands, in June of 2001. Under the broad designation of “critical infrastructures,” the Conference brought together a range of experts to discuss technology, policy and management in a context much influenced by the dynamics of the process of knowledge accumulation, which drives learning societies. Thus, this special issue includes a set of extended contributions to the Delft conference, and the aim of this introductory paper is to set the stage for these contributions, with an original contribution on possible views on the role critical infrastructures play to foster innovation in the learning society.     

The potential imposition of wage controls on nurses: a threat to nurses, patients, and hospitals

When there are shortages of RNs, hospitals and health care organizations in competitive nurse labor markets respond by increasing wages: some hospitals will respond faster and some will offer higher wages than others. The wage increase brings about two important short and long-run outcomes that, together, will increase the supply of RNs in the labor market. Because wage controls prevent the flexibility of wages to adjust, they can cause a shortage to develop when the demand for RNs is increasing (as in the 1970s), and wage controls will lengthen the duration of a shortage once it has begun. The impacts of prolonged RN shortages are multifaceted and destructive to nurses, patients, and hospitals. Looking ahead over the next 15 years when the demand for RNs is expected to grow by roughly 3% per year and the supply of RNs by much less than that, a new nursing shortage is projected to develop and reach a deficit of 285,000 RNs by 2020. The worst thing that could happen to the nursing profession would be to impose wage controls on nurses as this would prevent the needed short and long-run labor supply responses from developing and thereby eliminate the shortage.     

Regional decentralization and fiscal incentives: Federalism,Chinese style

Aligning the interests of local governments with market development is an important issue for developing and transition economies. Using a panel data set from China, we investigate the relationship between provincial government's fiscal incentives and provincial market development. We report three empirical findings. First, we find that during the period of “fiscal contracting system” the discrepancy between ex ante contracts and ex post implementation was relatively small, suggesting that the fiscal contracts were credible. Second, we find a much higher correlation, about four times, between the provincial government's budgetary revenue and its expenditure during 1980s and 1990s as compared to 1970s, demonstrating that provincial governments faced much stronger ex post fiscal incentives after reform. Third, we find that stronger ex ante fiscal incentives, measured by the contractual marginal retention rate of the provincial government in its budgetary revenue, are associated with faster development of the non-state sector as well as more reforms in the state sector in the provincial economy. This holds even when we control for the conventional measure of fiscal decentralization. Finally, we compare federalism, Chinese style, to federalism, Russian style.     

Business incentives for sustainability: a property rights approach

Public and private demands for sustainable development put pressure on firms to develop strategies that include environmental concerns. Environmental effects from products often appear as externalities, outside the legal boundary of the producing company. These companies often possess the best competence to optimise the total life cycle environmental performance of its products. They are, however, neither obliged nor stimulated enough by policy incentives to do so from a sustainable development perspective. The policy instruments used today are mostly of a control-and-demand type, i.e. they do not create sufficient incentives to go further than hedging over set requirements. Environmental concerns and tightened environmental policy parameters have mostly been associated with the notion of additional costs and thus a restriction on economic performance. However, since the mid 1990s, several papers have called for corporate win–win situations as well as instruments giving up-stream incentives for change, but not enough abatement of environmental impacts has emerged in reality. Perhaps this is due to the lack of proper connection between economic theory on the one hand, and incentive advocating articles and instruments on the other. We propose a concept for trading of product life cycle (PLC) emission rights, based on property rights and transaction cost theories considering the problem with asymmetric information over the value chain. The initial financial impacts from such PLC instruments are shown to be significant for the system provider, since emissions—and resource use—become production costs. This provides economic incentives to take an increased responsibility for information flow as well as initiatives for product innovations.     

Contests to become CEO: incentives, selection and handicaps

Should a firm favor insiders (handicap outsiders) when selecting a CEO? One reason to do so is to take advantage of the contest to become CEO as a device for providing current incentives to employees. An important reason not to do so is that this can reduce the ability of future CEOs and, hence, future profits. The trade-off between providing current incentives and selecting the most able individual to become CEO is the focus of this paper. If insiders are good enough (better or nearly as good as outsiders), incentive provision to insiders typically dominates and it is optimal to handicap outsiders, sometimes so severely that they have no chance to win the contest. However, if outsiders are sufficiently better than insiders, selection dominates and it is the insiders who are severely handicapped. This finding is in sharp contrast to the existing literature which has so far ignored this trade-off. In all, our model provides useful insight into contests to become CEO and rationalizes empirical regularities in the source of CEOs chosen by firms. In particular, our analysis helps to explain the lower tendency of firms in more heterogeneous industries and firms with a product or line of business organizational structure to select an outsider as CEO.     

Crime,incentives and political effort: Evidence from India

Political representatives with criminal backgrounds are considered a great problem in many countries. In India, public disclosure of the large share of politicians currently facing criminal charges has sparked a heated public debate and emerging literature assessing the causes and effects. We develop two hypotheses based on our theoretical considerations. Based on the coding of published affidavits and a comprehensive set of three proxies to measure effort in the 14th Lok Sabha over the 2004–2009 legislative period, we put these hypotheses to an empirical test. Members of the parliament (MPs) facing criminal accusations exhibit on average about 5% lower attendance rates and lower utilization rates in a local area development fund, but only insignificantly lower parliamentary activity. In line with our hypotheses, these differences decline in the development level of the constituency - a proxy for higher rent-seeking possibilities and monitoring intensity. We argue and demonstrate why these negative relations should constitute an upper bound estimate of the causal effect, and show that even under conservative assumptions the effect is unlikely to be caused by unaccounted selection-bias.     

Opportunism,incentives, and the m-form hypothesis: A laboratory study

Opportunism is one central premise of the M-form hypothesis. This premise is investigated in a laboratory experiment using M-form and U-form organizations under incentives based on corporate profit and divisional profits. There was greater opportunism under U-form organization than under the M-form, and under divisional profit than under corporate profit incentives. Additionally, a misguided altruism lead a number of individuals to misrepresent information. The M-form yields higher performance than the U-form. Also, corporate profit incentives yield higher total profit than divisional profit incentives. The results partially explain why empirical studies do not strongly support the M-form hypothesis.     

Eliciting beliefs: Proper scoring rules,incentives, stakes and hedging

Proper Scoring Rules (PSRs) are popular incentivized mechanisms to elicit an agent's beliefs. This paper combines theory and experiment to characterize how PSRs bias reported beliefs when (i) the PSR payments are increased, (ii) the agent has a financial stake in the event she is predicting, and (iii) the agent can hedge her prediction by taking an additional action. In contrast with previous literature, the PSR biases are characterized for all PSRs and all risk averse agents. Our results reveal complex distortions of reported beliefs, thereby raising concerns about the ability of PSRs to recover truthful beliefs in general decision-making environments.