Incentives and Discrimination

Incentives and Discrimination 1

Optimal incentive mechanisms may require that agents be rewarded differentially even when they are completely identical and induced to act the same. We demonstrate this point using a simple incentive model where agents’ decisions about effort exertion are mapped into a probability that the project will succeed. We show that full discrimination across all agents is required if and only if the te...

Price discrimination and investment incentives

a r t i c l e i n f o JEL classifications: F13 L42 L13 D92 Keywords: price discrimination investment parallel trade pharmaceuticals net neutrality We examine a model of a monopolist selling to two segments of consumers with different preferences for quality. We show that if the firm is unable to price discriminate between the segments, then there is less investment in quality. We find that both...

Incentives for non-price discrimination

A regulated upstream monopolist supplies an essential input to firms in a downstream market. Non-price discrimination or sabotage becomes a concern when the upstream monopolist vertically integrates downstream. This article develops a simulation algorithm to determine the likelihood that discrimination will arise in equilibrium using data from the US long-distance market. Based on 1000 random d...

wages, incentives and productivity linkage

almost every experinced manager has been faced with the necessity of dealing with the problems of productivity in connection with wages and salaries. during the last two decades, governments, cultural centers, managers and ::::union::::s have focused their attention on productivity as an important subject and there have been many articles emphasizing the linkage between wages and productivity a...

Societal Discrimination against Muslims in Europe: Racism and Political Opportunism