Dynamic Incentive Effects of Heterogeneity in Multi-Stage Promotion Contests This paper shows that the incentive effects of heterogeneity may be positive rather than negative in dynamic contests with multiple stages. In particular, the well-studied adverse effects of heterogeneity in static interactions are compensated by positive continuation-value and selection effects. Due to these positive ...

We show experimentally that fairness concerns may have a decisive impact on the actual and optimal choice of contracts in a moral hazard context. Bonus contracts that offer a voluntary and unenforceable bonus for satisfactory performance provide powerful incentives and are superior to explicit incentive contracts when there are some fair-minded players. But trust contracts that pay a generous w...

The use of current performance as a partial basis for setting future targets is an almost universal feature of economic planning. This "ratchet principle," as it is sometimes called, creates a dynamic incentive problem for the enterprise. Higher rewards from better current performance must be weighed against the future assignment of more ambitious targets. In this paper I formulate the problem ...

We investigate an automobile supply chain where a manufacturer and a retailer serve heterogeneous consumers with electric vehicles (EVs) under a government’s price-discount incentive scheme that involves a price discount rate and a subsidy ceiling. We show that the subsidy ceiling is more effective in influencing the optimal wholesale pricing decision of the manufacturer with a higher unit prod...

In mechanism design it is typical to impose incentive compatibility and then derive an optimal mechanism subject to this constraint. By replacing the incentive compatibility requirement with the goal of minimizing expected ex-post regret, we are able to adapt techniques of statistical machine learning to the design of payment rules. This computational approach to mechanism design is applicable ...

This work consider the problem of flow control using incentive strategy in Stackelberg game theory. The network model employed here is that users route their flows from a common source to a common destination node, each of them trying to optimize its individual performance objective. First, the existing Stackelberg routing strategy is briefly introduced. And then, the linear Stackelberg incenti...

the aim of this study was to evaluate the health–related physical fitness status of men aged between 50 and 65 in isfahan. 385 non-athlete men (mean age: 57.73±4.65 years, height: 167.94±6.04 cm, weight: 76.88±9.45 kg) aged between 50 and 65 were randomly selected as the sample. this study used physical fitness standard tests including flexibility test of sit and reach, rockport walking, curl-u...

We use experiments to test comparative statics predictions of canonical tournament theory. Both the roles of principal and agent are populated by human subjects, allowing us to test predictions for both incentive responses and optimal tournament design. Consistent with theory, we observed an incentive effect from raising the winner’s prize. However, we also observed several empirical puzzles th...

We study a large economy model in which individuals have private information about their productive abilities and their preferences for public goods. A mechanism design approach is used to characterize implementable tax and expenditure policies. A robustness requirement in the sense of Bergemann and Morris (2005) yields individual incentive compatibility constraints that are equivalent to those...

We address the problem of maximizing the social welfare in a peer-to-peer streaming overlay given a fixed amount of server upload capacity. We show that peers’ selfish behavior leads to an equilibrium that is suboptimal in terms of social welfare, because selfish peers are interested in forming clusters and exchanging data among themselves. In order to increase the social welfare we propose a n...