Harvard Business School professor Mihir Desai believes American companies and investment firms have erred–horribly–by linking manager compensation so tightly to financial market performance. In the current Harvard Business Review, he identifies this as a giant FIB, a Financial Incentive Bubble: American capitalism has been transformed over the past three decades by the idea that financial [...]
Posts Tagged ‘Incentives’
Is Incentive Compensation a Giant FIB?
Posted in Business, Finance, Microeconomics, tagged Business, Finance, Incentives, Inequality on February 28, 2012 | 5 Comments »
How Do Consumers Spend Engine Efficiency Advances? On Bigger, Faster Cars
Posted in Energy, Microeconomics, tagged Auto, Energy, Gasoline, Incentives, Offsetting Behavior on January 5, 2012 | 4 Comments »
Auto companies have made great strides in improving engine efficiency in recent decades. But those improvements haven’t done much to improve the fuel economy of America’s passenger car fleet. Instead, consumers have “spent” most of those efficiency improvements on bigger, faster cars. MIT economist Christopher Knittel has carefully quantified these tradeoffs in a recent paper in the American Economic [...]
You Can’t Manage What You Don’t Measure Correctly, NYC Crime Edition
Posted in Data, Microeconomics, tagged Crime, Incentives, Measurement, New York City on January 2, 2012 | 2 Comments »
You can’t manage what you don’t measure. That’s good advice, as far as it goes. But it has a dark underside: managing the measurement rather than actual outcomes. Over at the New York Times, Al Baker and Joseph Goldstein recount a troubling example. To keep reported crime rates low, New York’s Finest may be under [...]
The Invisible Hand is Made of Delicious Invisible Meat
Posted in Life, Microeconomics, tagged Humor, Incentives, Tragedy of the Commons, TripAdvisor on September 30, 2011 | Leave a Comment »
The incomparable xkcd on incentives, morals, and TripAdvisor: Here’s another favorite.
Moral Hazard, Pakistan Edition
Posted in Budget, International, tagged Incentives, International, Moral Hazard, Pakistan on May 17, 2011 | 3 Comments »
The United States can’t pursue al Qaeda alone. We need help from other nations. To encourage nations to provide that help, the U.S. created the Coalition Support Fund to reimburse coalition partners for the costs they incur fighting terrorism. As Adam Entous reports in the WSJ, the prospect for such “reimbursement” creates an obvious incentive: our partners may exaggerate how [...]
Incentives and Property Rights, Dead Raccoon Edition
Posted in Life, Nature, tagged Incentives, Life, Nature, Property Rights on May 9, 2011 | 9 Comments »
It seems like only yesterday that I met Rocky. Probably because it was yesterday. Our smallest cat Caramel was staring intently upward. Following his gaze, I spied Rocky tucked between two branches high in the silver maple near our deck. Rocky didn’t look well. Raccoons aren’t usually out and about at 3:00 on a sunny [...]
How Do Entrepreneurs Operate in Afghanistan?
Posted in International, tagged Afghanistan, Entrepreneurship, Incentives, International, Transaction Cost Economics on November 26, 2010 | 4 Comments »
“Uncertainty, not insecurity, is the fundamental problem for business” in Afghanistan according to a new study by Jake Cusack and Erik Malmstrom at the Center for a New American Security (ht: Zach W.). In “Afghanistan’s Willing Entrepreneurs: Supporting Private-Sector Growth in the Afghan Economy,” they report: In national surveys, insecurity ranks at the top of [...]
Advice to Nasdaq and the NYSE: Cancel Only 90% of the “Erroneous” Trades
Posted in Finance, Microeconomics, Uncategorized, tagged Finance, Incentives on May 9, 2010 | 4 Comments »
Nasdaq and the New York Stock Exchange have both announced that they will cancel many trades made during the temporary market meltdown between 2:40 and 3:00 last Thursday afternoon (see, for example, this story from Reuters). These “erroneous” trades include any that were executed at a price more than 60% away from their last trade [...]
The Warped Economics of Carry-On Luggage
Posted in Uncategorized, tagged Airlines, Incentives, Tragedy of the Commons on October 23, 2009 | 26 Comments »
I just got home from a quick trip to Denver, where I spoke at a Concord Coalition event on our nation’s dire fiscal outlook. That’s a big, complex problem, but today I’d like to share some thoughts on an even more vexing problem: the warped economics of carry-on luggage. As you probably know, most major [...]
Most Requested
Twitter
Get Updates by Email
Get Updates by RSS
Share or Bookmark
-
Recent Posts
- The World’s Most Traveled Bird?
- Is the United States the Best Place for Women?
- Is the Reliability of Public Opinion Surveys Declining?
- Fixing Medicare’s Double-Counting Problem
- Energy Security, the Infographic
- The Fight over Medicare Double Counting
- Why Free is a Bad Price, American Airlines Edition
- Jobs Report – The Soft Side of Mediocre
- Investing in Memories, Ocelot Edition
- Advanced Game Theory, Golden Balls Edition
- Entitlement Spending in One Picture
- Talking Tax Reform on the PBS Newshour
- The Federal Budget in One Picture
- Should We Blame TurboTax for Tax Code Complexity?
- How Big Are Tax Preferences?
30-Second Economics
Tags
Categories
Archives
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
Translate this blog into
