Information systems (IS) projects are often delivered late, over budget, and not always to required specifications. This is an ongoing problem that has eluded researchers and practitioners for decades, but to overcome these problems better ways to manage the success of project development and implementation are needed. We investigate the use of incentives in IS projects during development and i...

With the advent of restructured electricity markets a contentious market design issue has been whether unit commitment decisions should be made centrally by the system operator or by individual generators. Although a centrally committed market can, in theory, determine the most efficient commitment, they have been shown to suffer some equity and incentive problems. A self-committed market can o...

I use unique datasets from peer-to-peer lending platforms and a platform entry event to study competition among financial intermediaries. Under competition, the risk-adjusted interest rate decreases for safe borrowers but increases for risky borrowers, and the incumbent platform becomes less prudent in borrower screening, and the corresponding loan performance is aggravated. Competition distort...

An Experimental Study on the Incentives of the Probabilistic Serial Mechanism by David Hugh-Jones, Morimitsu Kurino and Christoph Vanberg* We report an experiment on the Probabilistic Serial (PS) mechanism for allocating indivisible goods. The PS mechanism, a recently discovered alternative to the widely used Random Serial Dictatorship mechanism, has attractive fairness and efficiency propertie...

Do firms have adequate incentives to invest in anti-terrorism mechanisms? This paper develops a framework for addressing this issue when the security choices by one agent affect the risks faced by others. We utilize the airline security problem to illustrate how the incentive by one airline to invest in baggage checking is affected by the decisions made by others. Specifically if an airline bel...

In recent years, legislatures have imposed several types of guidelines restricting court discretion. Guidelines designed around ‘‘average’’ cases, however, can lead to problems for ‘‘nonaverage’’ situations. In the context of divorce, poorly designed child support guidelines may create an opportunity for a netwealth transfer in excess of the costs of children for ‘‘nonaverage’’ families and the...

This paper sets up a model to account for differences in total factor productivity due to differences in enforcement of contracts. Vertical specialization generates the need for intra-period credit, because final goods producers cannot pay their intermediate goods suppliers before they produce their final good. The paper shows that if there are enforcement problems, the capital distribution is ...

In a basic economic system, each participant receives a (financial) reward according to his own contribution to the system. In this work, we study an alternative approach – Incentive Networks – in which a participant’s reward depends not only on his own contribution; but also in part on the contributions made by his social contacts or friends. We show that the key parameter effecting the effici...

The most prominent way to establish trust between buyers and sellers on online auction sites are reputation mechanisms. Two drawbacks of this approach are the reliance on the seller being long-lived and the susceptibility to whitewashing. In this paper, we introduce so-called escrow mechanisms that avoid these problems by installing a trusted intermediary which forwards the payment to the selle...

P2P systems, which are composed of unknown agents, have many problems in data sharing and creating. The main problem is concerned with the absence of the proper incentive mechanism for cooperating and feeding the systems. If the participants of P2P systems are not supported by proper incentives for data sharing and creating, the systems will starve from resources through extinction of sharers a...