The paper explores the problem of motivation in organizations. This problem arises because people may prefer to pursue their own interest instead of the firm's common goals (the two underlying forces in any organization). First, the most representative economic proposals to motivate people are studied and summarized. The study leads us to the conclusion that those proposals do not mitigate the conflict of interests, because they do not make people pursue the common goals. To solve the problem, the common elements (...) of the firm must be promoted. In order to be really "common," those elements must be composed of "nonmaterial" goods. which are the only perfectly shareable ones. They motivate workers by attracting their internal faculties, making the job more interesting and appealing, and providing it with a meaning. Finally, these considerations imply that a richer model of human motivation must be developed in order to reach more comprehensive conclusions. (shrink)

The paper explores the problem of motivation in organizations. This problem arises because people may prefer to pursue their own interest instead of the firm's common goals . First, the most representative economic proposals to motivate people are studied and summarized. The study leads us to the conclusion that those proposals do not mitigate the conflict of interests, because they do not make people pursue the common goals. To solve the problem, the common elements of the firm must be promoted. (...) In order to be really "common," those elements must be composed of "nonmaterial" goods. which are the only perfectly shareable ones. They motivate workers by attracting their internal faculties, making the job more interesting and appealing, and providing it with a meaning. Finally, these considerations imply that a richer model of human motivation must be developed in order to reach more comprehensive conclusions. (shrink)

This essay begins by summarizing the reasons why unregulated health-care markets are inefficient. The inefficiencies stem from the asymmetries of information among providers, patients and payers, which give rise to moral hazard and adverse selection. Attempts to ameliorate these inefficiencies by means of risk-adjusted insurance and monetary incentives such as co-pays and deductibles lessen the inefficiencies at the cost of increasing inequalities. Another possibility is to rely on non-monetary incentives, including ordeals. While not a magic bullet, (...) these are feasible methods for addressing the inadequacies of market provision of health care, such as moral hazard. (shrink)

In this study, we explore the role of Chief Executive Officers’ incentives, split between monetary and non-monetary, in relation to corporate social responsibility. We base our analysis on a sample of 597 US firms over the period 2005–2009. We find that both monetary and non-monetary incentives have an effect on CSR decisions. Specifically, monetary incentives designed to align the CEO’s and shareholders’ interests have a negative effect on CSR and non-monetary (...) class='Hi'>incentives have a positive effect on CSR. The study has important implications for the design of executive remuneration plans, as we show that there are many levers that can affect the CEO’s decisions with regard to CSR. Our evidence also confirms the prominent role of the CEO in relation to CSR decisions, while also recognizing the complexity of factors affecting CSR. Finally, we propose a research design that takes into account endogeneity issues arising when examining compensation variables. (shrink)

In mainstream business and economics, prizes such as the Presidential Medal of Freedom are understood as special types of incentives, with the peculiar features of being awarded in public, and of having largely symbolic value. Informed by both historical considerations and philosophical instances, our study defines fundamental theoretical differences between incentives and prizes. The conceptual factors highlighted by our analytical framework are then tested through a laboratory experiment. The experimental exercise aims to analyze how prizes and incentives (...) impact actual individuals’ behavior differently. Our results show that both incentives (monetary and contingent) and prizes (non-monetary and discretional rewards) boost motivation to perform if awarded publicly, but only prizes crowd in motivation promoting virtuous attitude. (shrink)

Israel Kirzner cautions us that, because commodity price arbitrage as such does not operate outside commodity markets, the logic of Pareto-improving entrepreneurship does not provide a “copybook example” for explaining the evolution of social institutions in general. He characterizes Menger’s theory of the emergence of money as non-entrepreneurial; by implication, while it assures us that some monetary standard will emerge, it does not assure us that a superior monetary standard will spontaneously emerge. I argue that entrepreneurial opportunities for (...) private gain do in fact drive the Mengerian evolution from barter to money, and systematically promote the emergence of superior monetary standards, though not necessarily the best conceivable standards. In choosing among potential exchange media to accept and offer, a pre-monetary trader has a private incentive to choose commodities that have whatever properties other traders prefer in their exchange media.Israel Kirzner nous met en garde sur le fait que parce que l’arbitrage des prix des marchandises en soi n’opère pas hors des marchés des produits, la logique de l’amélioration de l’esprit d’entreprise ne procure pas un “exemple classique” pour expliquer l’évolution des institutions sociales en général. Il caractérise la théorie mengerienne de l’émergence de la monnaie comme étant non entrepreneuriale; l’implication en est que si cette théorie nous assure qu’un certain étalon monétaire va émerger, elle ne peut affirmer avec certitude que cet étalon monétaire spontané sera supérieur.L’article suggère que des opportunités entrepreneuriales de gains privés orientent en effet l’évoluti- on décrite par Menger d’une situation de troc vers une économie monétaire et promeuvent systéma- tiquement l’émergence d’étalons monétaires supérieurs, bien que pas nécessairement les meilleurs étalons concevables. En choisissant parmi les intermédiaires d’échange potentiels lequel accepter ou offrir, un négociant d’avant l’ère monétaire a une insitation privée à choisir les marchandises dotées de propriétés que les autres négociants préfèrent dans le cadre de leurs échanges. (shrink)

Cet article étudie les effets de l’absence de prix monétaires sur la coordination des actions individuelles sur le marché politique. Il s’articule autour de deux parties. Il rappelle, dans la première, que le prix monétaire est une condition nécessaire du calcul économique et qu’il est un pré-requis institutionnel de la coordination des anticipations opérée par l’entrepreneur sur le marché. La deuxième partie se cale sur ce résultat. Elle expose, tout d’abord, les conséquences sur la formation des préférences politiques de l’impossibilité (...) pour les électeurs de pratiquer un calcul monétaire et expl ique, ensui te, comment malgré l’absence de prix monétaire, l’entrepreneur politique ajuste l’offre à la demande politique. Nous montrons que la coordination politique se fait autour de l’activité de l’entrepreneur politique, mais que le processus de reconnaissance des préférences politiques passe par la prise de parole et la normalisation idéologique du discours politique et non par le système des prix et la normalisation monétaire des préférences économiques. La coordination politique possède, pour cette raison, une moindre efficacité cognitive que la coordination économique.This paper studies the implications of the lack of monetary prices for the modes of individuals calculus’ coordination on the “political market”. On the economic market, the evaluation of decision costs is based on monetary prices. The entrepreneurs’ decisions are led by the profit expectations they build on the information embodied in market prices. Given that there is no price on the “political market”, how are individuals informed? What are their incentives to act? And how are their actions coordinated? It is argued that 1) the electoral system provides information on the individuals’ preferences between “being candidate” and “being represented”, 2) the individuals are induced to be candidate since the existing political supply does not meet their expectations, and 3) the coordination is achieved through ideology that acts as a signaling mechanism. (shrink)

(2001). Is Informed Consent Enough? Monetary Incentives for Research Participation and the Integrity of Biomedicine. The American Journal of Bioethics: Vol. 1, No. 2, pp. 49-51.

In order to improve our understanding of the components that reflect functionally important processes during reward anticipation and consumption, we used principle components analyses (PCA) to separate and quantify averaged ERP data obtained from each stage of a modified monetary incentive delay (MID) task. Although a small number of recent ERP studies have reported that reward and loss cues potentiate ERPs during anticipation, action preparation, and consummatory stages of reward processing, these findings are inconsistent due to temporal and spatial (...) overlap between the relevant electrophysiological components. Our results show three components following cue presentation are sensitive to incentive cues (N1, P3a, P3b). In contrast to previous research, reward‐related enhancement occurred only in the P3b, with earlier components more sensitive to break‐even and loss cues. During feedback anticipation, we observed a lateralized centroparietal negativity that was sensitive to response hand but not cue type. We also show that use of PCA on ERPs reflecting reward consumption successfully separates the reward positivity from the independently modulated feedback‐P3. Last, we observe for the first time a new reward consumption component: a late negativity distributed over the left frontal pole. This component appears to be sensitive to response hand, especially in the context of monetary gain. These results illustrate that the time course and sensitivities of electrophysiological activity that follows incentive cues do not follow a simple heuristic in which reward incentive cues produce enhanced activity at all stages and substages. (shrink)

Investors' confidence in the financial market is boosted by good corporate governance (CG). Good governance builds trust and improves an organization's financial performance (FP). However, organizations with bad management lose the trust of their stakeholders because they do not perform well financially. Therefore, the purpose of this study is to examine the influence of CG 89; on FP through mediating the role of humble leadership (HL) and monetary incentive (MI) as a moderator between CG and HL. Data were collected (...) from 300 respondents who were working in various cement manufacturing organizations located in different cities of Pakistan. The analysis was performed using SPSS software version 25 and AMOS version 22 software to work out the study sample size. The result revealed that the framework of CG has a positive impact in terms of FP. Furthermore, HL positively and significantly mediates on CG, and FP is inextricably linked. However, MI acts as a moderator between CG and HL, but despite strengthening, it weakens the impact of CG' on HL. This study contributes toward the literature, specifically toward the expectancy theory literature. Finally, some theoretical and practical implications at the organizational level are offered, describing how CG influences FP within the organization, and research limitations and future directions are presented. (shrink)

There are disagreements among ethicists on what comprises an “appropriate” good to offer research participants. Debates often focus on the type, quantity, timing, and ethical appropriateness of such offers, particularly in settings where participants may be socio-economically vulnerable, such as in parts of Zambia. This was a Cross-sectional online survey of researchers and Research Ethics Committees designed to understand practices, attitudes and policies associated with provision of goods to research participants. Of 122 responding researchers, 69 met eligibility criteria. Responses were (...) also received from five of the six Zambian RECs involved in reviewing research proposals. Forty-nine researchers confirmed previous experience offering goods to participants. Of these, 21 offered participants money only, 18 offered non-monetary goods, while the rest offered both monetary and non-monetary goods. Generally, goods were offered and approved by RECs to compensate for time, lost wages and transportation. One REC and 34.8% of researchers reported being subject to an institutional policy on offering goods to participants. While reimbursement is the main reason for offering goods to participants in Zambia, caution is required when deciding on the type and quantity of goods to offer given the potential for community mistrust and manipulation. (shrink)

ABSTRACT There are disagreements among ethicists on what comprises an “appropriate” good to offer research participants. Debates often focus on the type, quantity, timing, and ethical appropriateness of such offers, particularly in settings where participants may be socio-economically vulnerable, such as in parts of Zambia. This was a Cross-sectional online survey of researchers and Research Ethics Committees (RECs) designed to understand practices, attitudes and policies associated with provision of goods to research participants. Of 122 responding researchers, 69 met eligibility criteria. (...) Responses were also received from five of the six Zambian RECs involved in reviewing research proposals. Forty-nine researchers (71.0%) confirmed previous experience offering goods to participants. Of these, 21 (42.9%) offered participants money only, 18 (36.7%) offered non-monetary goods, while the rest offered both monetary and non-monetary goods. Generally, goods were offered and approved by RECs to compensate for time, lost wages and transportation. One REC and 34.8% of researchers reported being subject to an institutional policy on offering goods to participants. While reimbursement is the main reason for offering goods to participants in Zambia, caution is required when deciding on the type and quantity of goods to offer given the potential for community mistrust and manipulation. (shrink)

Irrelevant emotional stimuli often capture attention, disrupting ongoing cognitive processes. In two experiments, we examined whether availability of rewards can prevent...

The brand personality of nonprofit service organizations is a focal cue for individuals engaging in pro-social behavior. However, the positive effect of brand personality on donors’ intention to engage pro-socially may be affected in cases in which NPOs provide monetary incentives to those donors. Relying on social exchange theory, the authors examine how monetary incentives and brand personality commonly affect the intention to donate and whether this effect varies based on the perceived trustworthiness of the NPO. (...) The results of two experimental studies show that branding and incentivizing decisions should not be developed independently because monetary incentives do indeed undermine the positive effects of brand personality on the intention to donate. However, the effectiveness of incentives varies with the perceived level of trust in the NPO: highly trusted NPO services are harmed by monetary incentives, whereas less-trusted NPOs may even benefit. (shrink)

Recently, business organizations have increasingly turned to a novel form of non-monetary incentives—that is, “gamification,” which refers to a motivation technique using video game elements, such as digital points, badges, and friendly competition in non-game contexts like workplaces. The introduction of gamification to the context of human resource management has immediately become embroiled in serious moral debates. Most notable is the accusation that using gamification as a motivation tool, employers exploit workers. This article offers an in-depth analysis of (...) the moral charge of exploitation. This article maintains that there are no clear grounds for believing that gamification of labor is exploitative and that if gamification of labor involves a wrong or vice, it must be something other than exploitation. (shrink)

Trust can be thought of as a three place relation: A trusts B to do X. Trustworthiness has two components: competence (does the trustee have the relevant skills, knowledge and abilities to do X?) and willingness (is the trustee intending or aiming to do X?). This chapter is about the willingness component, and the different motivations that a trustee may have for fulfilling trust. The standard assumption in economics is that agents are self-regarding, maximizing their own consumption of goods and (...) services. This is too restrictive. In particular, people may be concerned with the outcomes of others, and they may be concerned to follow ethical principles. I distinguish weak trustworthiness, which places no restrictions on B’s motivation for doing X, from strong trustworthiness, where the behaviour must have a particular non-selfish motivation, in finance the fiduciary commitment to promote the interests of the truster. I discuss why strong trustworthiness may be more efficient and also normatively preferable to weak. In finance, there is asymmetric information between buyer and seller, which creates a need for trustworthy assessment of products. It also creates an ambiguity about whether the relationship is one of buyer and seller, governed by caveat emptor, or a fiduciary relationship of advisor and client. This means that there are two possible reasons why trust may be breached: because the trustee didn’t realise that the truster framed the relationship as a fiduciary one, or because the trustee did realise but actively sought to take advantage of the trust. Correspondingly, there are two possible types of agent: normal people who are not always self-regarding and who are trust responsive (if they believe that they are being trusted then they are likely to fulfill that trust), and knaves, after Hume’s character who is always motivated by his own private interest. We can increase the trustworthiness of normal people by getting them to re-frame the situation as one of trust, so they will be strongly trustworthy (i.e. change of institutional culture), and by providing non-monetary incentives (the correct choice of incentive will depend on exactly what their non-selfish motivation is). Knaves need sanctions, which can make them weakly trustworthy. However, this is a delicate balance because sanctions can crowd out normative frames. We can also increase the trustworthiness of financiers by making finance less attractive to knaves; changing the mix of types in finance could help support the necessary cultural change. (shrink)

To what extent can external incentives influence students’ effort and learning in online course contexts? While cognitive science research has found that monetary incentives can increase goal-directed cognitive effort in certain laboratory tasks, attempts to use monetary incentives to increase students’ academic performance in naturalistic settings has shown mixed results. In two experiments, we tested the influence of a monetary incentive on immediate and delayed tests of computer-based educational performance. In Experiment 1, participants were (...) assigned to receive monetary incentives for correct quiz responses, or receive no additional incentive for correct responses other than finding out their score, and we found no significant difference in total score across groups. In Experiment 2, we used a within-subjects design to test whether participants performed better when they were provided monetary incentives for correct responses on quiz questions. Here, participants performed significantly better on incentivized quiz questions. Thus, monetary incentives may increase performance in online learning tasks when participants can anchor the “stakes” of an incentive compared to no external incentive. These findings highlight potential benefits of external incentives for promoting effort and learning in online contexts, although further research is needed to determine the most useful educationally-relevant extrinsic incentives, as well as potential negative effects of incentives on long-term intrinsic motivation. (shrink)

Background The twenty-first century has witnessed an exponential increase in healthcare quality research. As such activities become more prevalent, physicians are increasingly needed to participate as subjects in research and quality improvement (QI) projects. This raises an important ethical question: how should physicians be remunerated for participating as research and/or QI subjects? Financial versus non-monetary incentives for participation Research suggests participation in research and QI is often driven by conditional altruism, the idea that although initial interest in enrolling (...) in research is altruistic or prosocial, decisions to actually perform study tasks are cost–benefit driven. Thus, the three models commonly employed to appropriately compensate participants (in-kind compensation such as travel reimbursement, paying market rates for the subject’s time, and paying market rates for the activity asked of the participant) are a poor fit when the participant is a clinician, largely due to the asymmetry between cost and benefit or value to the participant. Non-monetary alternatives such as protected time for participation, continuing education or maintenance of certification credit, or professional development materials, can provide viable avenues for reducing this asymmetry. Conclusion Research and QI are integral to the betterment of medicine and healthcare. To increase physician participation in these activities as the subject of study, new models are needed that clarify the physician’s role in research and QI as a subject. Non-monetary approaches are recommended to successfully and ethically encourage research and QI participation, and thus incorporate these activities as a normal part of the ethical clinician’s and successful learning healthcare system’s world view. (shrink)

We analyze the results from three different risk attitude elicitation methods. First, the broadly used test by Holt and Laury, HL, second, the lottery-panel task by Sabater-Grande and Georgantzis, SG, and third, responses to a survey question on self-assessment of general attitude towards risk. The first and the second task are implemented with real monetary incentives, while the third concerns all domains in life in general. Like in previous studies, the correlation of decisions across tasks is low and (...) usually statistically non-significant. However, when we consider only subjects whose behavior across the panels of the SG task is compatible with constant relative risk aversion, the correlation between HL and self-assessed risk attitude becomes significant. Furthermore, the correlation between HL and SG also increases for CRRA-compatible subjects, although it remains statistically non-significant. (shrink)

Radical changes of our cultural values in the near future are inevitable, since the current culture is ecologically unsustainable. The present proposal, radical as it may seem to some, is accordingly offered as worthy of consideration. The main section of this article is on a proposed scheme, named Asset and Income Limits, for instituting maxima to the legitimate incomes and assets of individuals. This scheme involves every individual being associated with two bank accounts, an asset account (their own property) and (...) a holding account (held in escrow). Other parts of the advocated change in economic landscape are a radically different understanding of the concept of work and the introduction of a basic income. The roles of technology and culture, in creating both the opportunities and the obstacles to a transformation of society, are discussed. Non-monetary, non-convertible rewards for exceptional contributions to society are described. The scheme enhances freedom, being neutral in relation to many other value systems, such as the secular/sacred spectrum. The qualitative versus quantitative dichotomy is addressed, and it is concluded that the most that can be said of a just and sustainable society that has yet to be created is that the maximum income should be no more than one order of magnitude greater than the basic income, that is ~10 times at the most. Incentives for profitable employment would still be sufficient, and paying the basic income out of taxes on sales and/or non-basic income would be feasible. (shrink)

This book focuses on group behaviour in developing countries. It includes studies of producer and community organizations, NGOs, and some public sector groups. Despite the fact that most economic decisions are taken by people acting within groups -- families, firms, neighbourhood or community associations, and networks of producers -- the analysis of group functioning has not received enough attention, particularly among economists. Some groups function well, from the perspectives of equity, efficiency, and well-being, while others do not. This book explores (...) why. It covers groups that perform three types of function: overcoming market failures ; improving the position of their members, and distributing resources to the less well-off. It contrasts three modes of group behaviour: power and control; cooperation; and the use of material incentives. It explores what determines modes of behaviour of groups, and the consequences for efficiency, equity, and well-being. The book includes eleven case studies by different authors, including producers' associations in Brazil, farmers' organizations in Korea and Taiwan, community forestry groups in South Asia, organizations of sex-workers in Calcutta, and health NGOs in Uganda. Claims groups tended to be the most cooperative, cooperation fostering empowerment and self-esteem. Distributive or pro bono groups mostly operated according to power and control, while market failure groups often combined all three modes.The studies show the strong impact of norms in society as a whole on group behaviour. The recent shift towards a stronger role for market incentives has exerted powerful pressures on groups to use more material incentives, undermining the cooperation essential to sustain efficiency and equity. The universal presumption in favour of monetary incentives needs to be abandoned. Non-market behaviour needs to be valued and protected as well. (shrink)

Levels of trust and trustworthiness have important externalities for the society. But what exactly do these social concepts reflect? Building upon the argument that in typical real-life social exchanges people act simultaneously as both trustors and trustees, we study the impact of individuals’ social motives (or preferences) on their choices in a dual-role Trust Game (TG). We employ data from a large-scale representative experiment (N = 774), where all subjects played both roles of a binary TG with real monetary (...) incentives. Subjects’ social motives were inferred using their decisions in a Dictator Game and a dual-role Ultimatum Game. Next to self-interest and strategic motives we consider preferences for altruism, spitefulness, egalitarianism and efficiency. We demonstrate that there exists considerable heterogeneity in motives in the TG. Most importantly, among individuals who choose to trust as trustors, social motives can differ dramatically as there is a non-negligible proportion of them who seem to act out of (strategic) self-interest whereas others are driven more by efficiency considerations. Subjects’ elicited trustworthiness, however, can be used to infer such motivations: while the former are not trustworthy as trustees, the latter are. We discuss that research on trust can benefit from adding the second player’s choice in TG designs. (shrink)

Pregnant adolescents have a higher risk of poor maternal and fetal outcomes, particularly in the setting of concomitant maternal alcohol and other drug (AOD) use. Despite numerous programmes aimed at reducing overall teen pregnancy rates and the recognition of AOD use as a risk factor for unintended pregnancy in adolescents, interventions targeting this specific group have been sparse. In adult drug-using women, financial incentives for contraception have been provided but are ethically controversial. This article explores whether a trial could (...) ethically employ monetary incentives in adolescents with AOD use to promote the use of long-acting reversible contraception (LARC), with special attention to the relevant distinctions between adults and adolescents. We conclude that a trial of incentives to promote LARC in this patient population is ethically permissible if the incentives are small, are tied to completion of an educational activity to minimise the quick fix temptation and potential for non-attendance to the risks and benefits of LARC and are provided only to the adolescent after an assessment of her reasoning to rule out coercion (eg, by guardians) as motivation. Information about treatment for AOD use and follow-up care in case of problems with the contraceptive or desire for removal should also be provided. Before implementing such a trial, qualitative research with input from providers, potential patients and their parents should be conducted to inform the programme's specific structure. (shrink)

Business leaders are increasingly responsible for the societal and environmental impacts of their actions. Yet conceptual views on responsible leadership differ in their definitions and theoretical foundations. This study attempts to reconcile these diverse views and uncover the phenomenon from a business leader’s point of view. Based on rational egoism theory, this article proposes a formal mathematical model of responsible leadership that considers different types of incentives for stakeholder engagement. The analyses reveal that monetary and instrumental incentives (...) are neither sufficient nor necessary for business leaders to consider societal and environmental stakeholder needs. Non-monetary and non-instrumental incentives, such as leaders’ values and authenticity, as well as their planning horizons, counterbalance pure monetary and instrumental orientations. The model in this article complements the growing body of research on responsible leadership by reconciling its various conceptual views and providing a foundation for future theory development and testing. (shrink)

In Study 1, we test a theoretical model involving temptation, monetary intelligence (MI), a mediator, and unethical intentions and investigate the direct and indirect paths simultaneously based on multiple-wave panel data collected in open classrooms from 492 American and 256 Chinese students. For the whole sample, temptation is related to low unethical intentions indirectly. Multi-group analyses reveal that temptation predicts unethical intentions both indirectly and directly for male American students only; but not for female American students. For Chinese students, (...) both paths are non-significant. Love of money contributes significantly to MI for all students. In Study 2, using money as a temptation and giving them opportunities to cheat on a matrix task, most Chinese students (78.4 %) do not cheat in open classrooms; supporting survey and structural equation modeling (SEM) results in Study 1. However, students in private cubicles cheat significantly more (53.4 %) than those in open classrooms (21.6 %). Finally, students’ love of money attitude predicts cheating. Factor rich predicts the cheating amount, whereas factor motivator predicts the cheating percentage. Our results shed new light on the impact of temptation and love of money as dispositional traits, money as a temptation, and environmental context (public vs. private) on unethical intentions and cheating behaviors. (shrink)

Monetary incentives to increase COVID-19 vaccinations are widely used. Even if they work, whether such payments are ethical is contested. This paper reviews ethical arguments for and against using monetary incentives that appeal to utility, liberty, civic responsibility, equity, exploitation, and autonomy. It concludes that in low-income nations and nations with meagre safety nets and income inequality, policy-makers should proceed with caution.

Political scientists generally consider that the incentive for legislators to switch parties lies in their desire to be re-elected. While some scholars attribute defection to the legislators’ popularity and strong connections with their constituents which enable them to be re-elected without relying on party labels, others assert that legislators switch if they perceive that staying put might threaten their chances of re-election. In this paper, we find that the two assumptions, to some extent, contradict each other. More surprisingly, the two (...) contradictory hypotheses cohabit under the single non-transferable vote system. From an analysis of the switching in the Taiwanese Legislative Yuan, the empirical evidence shows that because of fierce intraparty competition in the multimember districts, not only barely elected but also top-ranked legislators switched party affiliation in order to avoid the loss in votes or even seats to their copartisans and to maximize their chances of re-election. (shrink)

Hertwig and Ortmann suggest paying participants contingent upon performance in order to increase the thoroughness they devote to a decision task. We argue that monetary incentives can yield a number of unintended effects including distortions of the subjective representation of the task and impaired performance. Therefore, we conclude that performance-contingent payment should not be generally employed in judgment and decision research.

'This book is an excellent, theoretically sound and politically relevant reader', Professor Wolfschaefer, Universitat des Bundeswehr, Hamburg 'Up to date complete overview of European monetary and fiscal policy issues. Highly readable, good mix of theory and data' 'I think the book contains a wealth of useful, precise information, presented in a straightforward, readable way in a quintessentially comparative perspective', Dr M Mclean, Royal Holloway University 'Excellent treatment - quite comprehensive, full references, accessible for non-economists', Charlotte Bretherton, Liverpool John Moores (...) Univesity 'A useful addition to student literature', MJ Macmillan, Exeter University 'This is a top class book and does not limit itself to assessing the adequacy of the European political economy to the precepts of advanced monetary economics...This book is an excellent tool for teaching EMU economics, and raising the level of EMU economics in the reaserch-field of international political economy. Students and scholars will appreciate the explicit assessment the authors make of complex economic issues, and their unbiased stance in the study of EMU economic and political interplay.' Miriam L.Campamella, Jean Monnet Professor, Faculty of Political Science, University of Turin. ECSA Review, Winter 2001This textbook offers a fresh and comprehensive examination of European monetary and fiscal policy in the third stage of Economic and Monetary Union. Professors Eijffinger and de Haan give a brief history of European economic integration before the transition to EMU, and continue with a comprehensive analysis of institutions, legislation, and policies. Their analysis includes the functions and goals of the European Central Bank, the Treaty on European Union, the Stability and Growth Pact, and the harmonization of taxes. Other topics discussed include the targets and instruments of European monetary policy, the integration of European financial markets, and the competition between financial institutions in Europe. (shrink)

We address the most fundamental yet routinely ignored issue in economics today: that of distributive impact of the monetary system on the real economy. By re-examining the logical implications of token re-presentation of value and Irving Fisher’s theory of exchange, we argue that producers of value incur incidental expropriation of wealth associated with the deflationary effect that new value supply has on the purchasing power of money. In order to remedy the alleged inequity we propose a value-added negative tax (...) (VANT) based on net individual contribution to the economic output, which is structured as a negative tax function geared to profits derived from eligible productive activities in consideration of their estimated deflationary impact. We show that an adequately optimised VANT can be non-inflationary and have zero net cost to the public. Furthermore, economic output stands to improve due to direct incentivisation of value creation, making the proposed scheme not only politically feasible but economically desirable. The proposal advances the principle of ‘fair money’, where all forms of economic value are attributed to their rightful owners prior to any positive taxation. (shrink)

In order to assess to the degree to which the provision of economic incentives can result in justified inequalities, we need to distinguish between compensatory incentive payments and non-compensatory incentive payments. From a liberal egalitarian perspective, economic inequalities traceable to the provision of compensatory incentive payments are generally justifiable. However, economic inequalities created by the provision of non-compensatory incentive payments are more problematic. I argue that in non-ideal circumstances justice may permit and even require the provision of non-compensatory (...) class='Hi'>incentives despite the fact that those who receive non-compensatory payments are not entitled to them. In some circumstances, justice may require us to accede to unreasonable demands for incentive payments by hard bargainers. This leads to a kind of paradox: from a systemic point of view, non-compensatory incentive payments can be justified even though those who receive them have no just claim to them. (shrink)