... that is installed can be uninstalled, and executives can be expected
to work for a change in their pay -for- long-term-performance scheme if their stock prices
start going down. To the extent that ...
1989), pp. 9 0-1 05. See also Kevin J. Murphy, “Corporate Performance and Managerial Performance,”
Journal of Accounting and Economics, vol. 7 (no. 2, 1985), pp. 1 1-4 2.
Chapter 15...
... market-based contracts, when in fact a firm’s hierarchical organization
is more cost-effective than market-based organizations, will simply be out-competed for
resources by the firms that do form ... People who direct
the work of others are frequently paid a premium for their efforts.
Chapter 6. Reasons for Firm Incentives
15
he does confess. His best choice is to confess....
... wholly right or wholly wrong, is foreign to him. The win-
list, yes-no discussion of politics is not within his purview. He does not recognize the
either-or, the all-or-nothing situation as his own. ... on Medicare for older patients and Medicaid for low-income
patients have increased the demand for healthcare services since the late 1960s,
which has tended to boost prices and forced...
... newspapers in when they are out of town.
Chapter 1. The Economic Way of Thinking
44
- for less money than the government charges for delivering a one-ounce letter across the street! [Ed.:
Some ... common for people to think that the only way for one group of
“stakeholders” in a firm to gain is for some other group to lose. The search is all too
frequently for ways to cut...
... mathematical formula for computing the present value of future costs or benefits received one year
from now is PV = [1/(1 + r)] f, where PV stands for present value, r for the rater of interest, and f for ... on that
information. People cannot assimilate all the information they need to make
rational choices, however. People do lack information, and they could make
better choices...
... concern for the poor, who
may be unable to afford the information necessary to make an informed choice. The poor
may also be the least capable of understanding technical product information, ... for the effects of price increases on goods like oil and gas.
Chapter 4 Government Controls: How Management
Incentives Are Affected
15
15
House Majority Leader Dick Armey, a long-ti...
... doing business for the
worker-owned firm would be higher than for the capitalist-owned firm, which means the
worker-owned firms would tend to fail in competition with capitalist-owned firms. ... finding that will be understandable from our
discussion of the “last-period problem” in an earlier chapter) . The median effort level for
the other team started at about 50, rose quickly to...
... area.
Chapter 7 Market Failures: External Costs
And Benefits
15
they would be willing to pay as much as $5,000 for it. Therefore, it looks like it should
be possible for a wealth-increasing ... holding it, for the parties to exchange hostages. For example, if
King A only has beautiful daughters then the best arrangement may be for him to ex-
change a beautiful daughter...