Search results for "incentive"
showing 10 items of 297 documents
Asymmetry of CEO Compensation and the Role of Relative and Macroeconomic Shocks in Risk Taking Incentives
2015
If managers are risk-averse and compensation schemes are not directly linked to shareholder wealth, incentives to allocate effort to manage effects of relative and macroeconomic shocks may be distorted. In this paper we develop a simple model to identify factors that determine the optimal allocation of effort to manage relative and macroeconomic shocks. We then show how serial correlation in shocks, the relative variance of shocks and the ability of managers to influence the effects of shocks on shareholder wealth determine the optimal allocation of managerial effort. Thereafter, we emphasize how CEO compensation depends on performance variables distinguishing between relative and macroecon…
IncentMe: Effective Mechanism Design to Stimulate Crowdsensing Participants with Uncertain Mobility
2018
Mobile crowdsensing harnesses the sensing power of modern smartphones to collect and analyze data beyond the scale of what was previously possible with traditional sensor networks. Given the participatory nature of mobile crowdsensing, it is imperative to incentivize mobile users to provide sensing services in a timely and reliable manner. Most importantly, given sensed information is often valid for a limited period of time, the capability of smartphone users to execute sensing tasks largely depends on their mobility pattern, which is often uncertain. For this reason, in this paper, we propose IncentMe, a framework that solves this core issue by leveraging game-theoretical reverse auction …
Financial incentive to prepay in fixed-rate mortgages
2004
The borrower's financial incentive to prepay is a crucial determinant in estimating prepayment in mortgage pools and, consequently, in valuing mortgage-backed securities. In mortgage prepayment literature, this incentive to prepay has been proxied by both the ratio of the loan rate to the refinancing rate and by the arithmetic spread between the two rates; however, the former is considered to be a better proxy of the refinancing incentive than the latter by a section of the literature. In this paper, the authors check the accuracy of that statement and subsequently estimate two prepayment functions using, alternatively, the two proxies. The results indicate that the use of the ratio does no…
Competition, risk taking, and governance structures in retail banking
2005
This paper investigates the extent to which the linkages between bank performance and governance structure affect deposits market competition and risk taking incentives when commercial banks compete with organizations with objectives different from profit maximization. These organizations include savings banks whose corporate and ownership structure yields an objective function that can incorporate labour expenses. It is found that such objective function enables the savings banks to capture a greater market share of bank deposits and to take on relatively less risk in their portfolio of investments. The empirical evidence from the Spanish retail banking sector documents these conclusions.
GOVERNANCE-BASED ACQUISITIONS AND RISK TAKING IN BANKING
2008
We examine the market for corporate control in banking when strategic acquisitions are driven by the different governance structures of commercial and savings banks. In contrast to profit-maximizing entities, we show that savings institutions can have acquisition incentives from their peculiar governance and ownership structure. Governance-based acquisition incentives, which interact with the specifics of the loan market in affecting bank risk taking, can arise when acquisitions take place sequentially or simultaneously, and also when financial intermediaries affect risk taking directly through the target return of investments or indirectly through the loan interest rate.
Mobility Fee—Creating Better Cities, Creating a Better Future!
2021
The following paper explores an alternative to financing public transportation in densely populated urban areas through ticket sales as a possible incentive to increase the usage of public transportation with the intent of reducing car traffic and pollution in urban spaces. It addresses the option of collecting a “mobility fee” from residents of an area to replace the revenue generated by ticket sales. Since the fee as it is envisioned in this paper would be collected from residents regardless of whether they actually use public transportation, this method would result in the usage of public transportation itself not being associated with any additional monetary cost. The text elaborates on…
An Outline for Funding Adaptation and Disaster Management Schemes
2012
This paper develops further a proposal to split continued climate negotiations into two separate blocks. The first block deals with historical emissions of greenhouse gases, including a mutual debt cancellation: the accumulated carbon debts of developed countries up to a cut-off year would be swapped for conventional monetary debts of developing countries. The second block deals with future emissions and how to finance adaption to climate change. Following the “polluter pays” principle, the funds should be collected in proportion to the responsibility for climate change and redistributed in proportion to the needs for adaption and management of climate-related risks. A system based on separ…
Incentive System Design Based on Accrual Accounting: A Summary and Analysis
2009
ABSTRACT: This paper provides a formal analysis on how to design accrual-based incentive systems so that a manager's and owner's interests are properly aligned. We introduce a general framework to summarize the literature, provide various extensions to it, and point to some of its limitations. We characterize the entire class of goal-congruent and preference-similar incentive systems when the owner has perfect as well as imperfect information about the manager's preferences. This allows us to show how compensation functions and performance measures are interrelated and to demonstrate what information should be incorporated into compensation functions and performance measures. We illustrate …
Incentives in Corporate Governance: The Role of Self-Regulation
2004
Corporate governance stems from the interplay of legal norms, security regulation, self-regulation and best practices. Recent scandals and frauds have forced governments to update laws on corporate governance: the legislation process has been very fast in some countries, others have lagged. Law and regulation intervene and become effective only ex-post, when damages have been done and malpractice is self-evident. On the contrary, self-regulation is a quicker and more flexible response to changing market conditions and of great impact on the relationship between firms and their environment. A self-regulatory organization (SRO) such as the stock exchange could administer the screening device,…
Reputation-Based Blockchain for Spatial Crowdsourcing in Vehicular Networks
2022
The sharing of high-quality traffic information plays a crucial role in enhancing the driving experience and safety performance for vehicular networks, especially in the development of electric vehicles (EVs). The crowdsourcing-based real-time navigation of charging piles is characterized by low delay and high accuracy. However, due to the lack of an effective incentive mechanism and the resource-consuming bottleneck of sharing real-time road conditions, methods to recruit or motivate more EVs to provide high-quality information gathering has attracted considerable interest. In this paper, we first introduce a blockchain platform, where EVs act as the blockchain nodes, and a reputation-base…