127,460 research outputs found

    Mortgaging the American Dream: The Misplaced Role of Accreditation in the Federal Student Loan System

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    In 2013, outstanding student loan balances in the United States exceeded $994 billion. This growing volume of student debt has had farā€“reaching consequences for both individual borrowers and society as a whole. In many ways, the federal student loan program, available to students under the Higher Education Act (HEA), has achieved its goal of making higher education more accessible. Undergraduate college enrollment increased from 10.5 million students in 1980 to 17.6 million students in 2009. Despite the benefit of increased enrollment, however, the federal loan program has been criticized for increasing student loan debt and contributing to the ā€œstudent loan crisis.ā€ This student loan crisis threatens to undermine the purpose of the HEA by making higher education less accessible to Americans. Higher education institutions must be accredited to be eligible for Title IV federal funding under the HEA. The federal government relies on accreditation to assess the academic quality of the institutions and programs to which it provides federal funding. This federal fundingā€“accreditation relationship, riddled with conflicts of interest, has been ineffective in regulating student loans, contributing to the mounting student loan debt. This Note examines the relationship between the federal student loan system and accrediting bodies through economic theory, ultimately arguing that the HEA be amended to decouple accreditation and federal student loans

    The rise of individual performance pay

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    xRelational contracts; Multiagent Moral Hazard; Indispensable human capital

    Peer Effects and Social Preferences in Voluntary Cooperation

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    Substantial evidence suggests the behavioral relevance of social preferences and also the importance of social influence effects ("peer effects"). Yet, little is known about how peer effects and social preferences are related. In a three-person gift-exchange experiment we find causal evidence for peer effects in voluntary cooperation: agents' efforts are positively related despite the absence of material payoff interdependencies. We confront this result with major theories of social preferences which predict that efforts are unrelated, or negatively related. Some theories allow for positively-related efforts but cannot explain most observations. Conformism, norm following and considerations of social esteem are candidate explanations.social preferences, voluntary cooperation, peer effects, reflection problem, gift exchange, conformism, social norms, social esteem

    Microfinance and Mechanism Design: The Role of Joint Liability and Cross-Reporting

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    Since the establishment of Grameen Bank in 1976 by Professor Muhammad Yunus , many economists have studied extensively, either theoretically or empirically, the success of the Grameen Bank in eradicating the poverty problem in Bangladesh. Therefore, this paper aims to apply the mechanism design theory in microfinance by examining the role of joint liability and cross-reporting mechanism in the loan contract which designing by microfinance lender. In doing so, this study simplified the joint liability mechanism proposed by Ghatak (1999, 2000) and cross-reporting mechanism by Rai and Sjostrom (2004). Based on the joint-liability mechanism, it is clearly stated that the microfinance lender can minimize or avoid the adverse selection problem in the credit market through peer selection and peer screening. In the meantime, the joint liability mechanism is better than individual lending in terms of increasing the social welfare among the poor borrower, charging lower interest rates and generating high repayment rates. In contrast, Rai and Sjostrom (2004) argue that joint liability alone is not enough to efficiently induce borrowers to help each other. Indeed, the cross-reporting mechanism is also important for lenders in order to minimize the problem of asymmetric information in the credit market. The cross-reporting mechanism is also efficient because it can influence the borrower to be truthful-telling about the state of the project and subsequently can minimize the deadweight loss (punishment) among the borrowers. In comparison, without cross-reporting, the lending mechanism is inefficient because the borrower will be imposed harsh punishment from the bank and the bank can undertake auditing or verify the state of the project and punish accordingly.Microfinance; mechanism design; joint liability; cross-reporting

    Scientists' coping strategies in an evolving research system: the case of life scientists in the UK

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    Scientists in academia have struggled to adjust to a policy climate of uncertain funding and loss of freedom from direction and control. How UK life scientists have negotiated this challenge, and with what consequences for their research and the research system, is the empirical entrance point of this paper. We find that policy impacts can be modulated and buffered by strategies and compromises devised and deployed at research performer level. This shifts conceptualisation from terms of responses to one of more or less proactive strategies of scientists and science organisations which add up, intentionally or unintentionally, to shifts in the overall system

    Monopolistic Group Design with Peer Effects

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    In a range of settings, private firms manage peer effects by sorting agents into different groups, be they schools, neighbourhoods or teams. This paper considers such a firm, which controls group entry by setting a series of anonymous prices. We show that private provision systematically leads to two distortions relative to the efficient solution: first, agents are segregated too finely; second, too many agents are excluded from all groups. We demonstrate that these distortions are a consequence of anonymous pricing and do not depend upon the nature of the peer effects. This general approach also allows us to assess the way the `returns to scale' of peer technology and the cost of group formation affect the optimal group structure.mechanism design, peer effects, public goods

    Supply chain management as the key to a firmā€™s strategy in the global marketplace

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    Purpose: This research aims to analyze the intersection of two literature streams: that of strategy and supply chain management (SCM). This review should create a better understanding of ā€œstrategic SCMā€ by focusing on relevant theories in the strategic management field and their intersection with SCM to develop a joint research agenda. Design/Methodology/Approach: We conducted a correspondence analysis on the content of 3,402 articles from the top SCM journals. This analysis provides a map of the intellectual structure of content in this field to date. The key trends and changes were identified in strategic SCM research from 1990-2014 as well as the intersection with the key schools of strategic management. Findings: The results suggest that SCM is key to a successful deployment of strategy for competing in the global marketplace. The main theoretical foundations for research in this field were identified and discussed. Gaps were detected and combinations of theoretical foundations of strategic management and SCM suggest four poles for future research: agents and focal firm; distributions and logistics strategic models; SCM competitive requirements; SCM relational governance. Research limitations/implications: Scholars in both the strategy and the SCM fields continue to search for competitive advantages. Much recent research indicates that strategic SCM can be a critical source for that advantage. One of the limitations of our research is that the analysis does not include every journal that published an article mentioning SCM. However, the 34 journals selected are reputed to be the most influential on SCM and focused primarily on SCM. Practical implications: The map of the intellectual structure of research to strategic SCM highlights the need to combine different theoretical approaches to the complex phenomenon of SCM. Practitioners should consider the supply chain as an informal organization and should devote time and resources to build a shared advantage across the supply chain. They should also consider the inherent benefits and risks that sharing Originality/value: The paper demonstrates that strategic SCM needs a balanced and rigorous combination of theoretical approaches to deliver more theory-driven evidences. Our research combines both a qualitative analysis and a quantitative methodology that summarizes gaps and then outlines future research from a large sample of articles. This methodology is an original contribution to this field and offers some assistance for enlarging the sample of future literature reviews

    Do CEOs Ever Lose? Fairness Perspective on the Allocation of Residuals Between CEOs and Shareholders

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    In this study we introduce a justice perspective to examining the result of bargaining between CEOs and boards over the allocation of firm residuals that ultimately determines CEO compensation. Framing CEO pay as the result of bargaining between CEOs and boards focuses attention on the power of CEOs to increase their share of firm residuals in the form of increased compensation, and the diligence of boards of directors to constrain CEO opportunism. Framing this negotiation through a theory of justice offers an alternative perspective to the search for pay-performance sensitivity. We predict and find that as board diligence in controlling opportunism declines and CEO power increases, CEOs are increasingly able to capture a larger portion of firm residuals relative to shareholders. This finding supports critics who charge that CEO pay violates norms of distributive and procedural justice

    The Rise of Individual Performance Pay

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    Why does individual performance pay seem to prevail in human capital intensive industries? We present a model that may explain this. In a repeated game model of relational contracting, we analyze the conditions for implementing peer dependent incentive regimes when agents possess indispensable human capital. We show that the larger the share of values that the agents can hold-up, the lower is the implementable degree of peer dependent incentives. In a setting with team effects ā€” complementary tasks and peer pressure, respectively ā€” we show that while team-based incentives are optimal if agents are dispensable, it may be costly, and in fact suboptimal, to provide team incentives once the agents become indispensable.relational contracts, multiagent moral hazard, indispensable human capital
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