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Payment Scheme (payment + scheme)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting50%

Selected Abstracts

Characterization of Revenue Equivalence

ECONOMETRICA, Issue 1 2009
Birgit Heydenreich
The property of an allocation rule to be implementable in dominant strategies by a unique payment scheme is called revenue equivalence. We give a characterization of revenue equivalence based on a graph theoretic interpretation of the incentive compatibility constraints. The characterization holds for any (possibly infinite) outcome space and many of the known results are immediate consequences. Moreover, revenue equivalence can be identified in cases where existing theorems are silent. [source]

Optimal Control of Selling Channels for an Online Retailer with Cost-per-Click Payments and Seasonal Products

PRODUCTION AND OPERATIONS MANAGEMENT, Issue 3 2007
Frank Y. Chen
The problem studied in this paper is a predigestion of the decision faced by online retailers (etailers) that advertise on publisher or comparison-shopping websites. An etailer may sell its product not only through its online and bricks-and-mortar stores, but also through the websites of one or more third parties (e.g., Yahoo.com). However, the etailer has to pay a certain amount to such third parties in an action-based payment scheme, such as a cost-per-click (CPC) scheme. Under the CPC scheme, payment is based solely on click-throughs, which means that the etailer pays only when a shopper clicks through to the product page of its website. Only a fraction of such clicks lead to actual sales. The extra cost that is associated with shoppers who first click through to the third-party websites makes them less attractive as customers than those who directly visit the etailer's online store. Moreover, the CPC rate for a prominent placement is normally set by competitive bidding, and thus varies over time. Therefore, the etailer needs to decide dynamically whether or not to list on a third-party website. The structural properties of the optimal policy are discussed, and numerical examples are given to show the revenue impact of dynamic listing control. [source]

Modernizing UK health services: ,short-sharp-shock' reform, the NHS subsistence economy, and the spectre of health care famine

JOURNAL OF EVALUATION IN CLINICAL PRACTICE, Issue 2 2005
Bruce G. Charlton MD
Abstract Modernization is the trend for societies to grow functionally more complex, efficient and productive. Modernization usually occurs by increased specialization of function (e.g. division of labour, such as the proliferation of specialists, in, medicine),, combined, with, increased, organization, in, order to co-ordinate the numerous specialized functions (e.g. the increased size of hospitals and specialist teams, including the management of these large groups). There have been many attempts to modernize the National Health Service (NHS) over recent decades, but it seems that none have significantly enhanced either the efficiency or output of the health care system. The reason may be that reforms have been applied as a ,drip-drip' of central regulation, with the consequence that health care has become increasingly dominated by the political system. In contrast, a ,short-sharp-shock' of radical and rapid modernization seems to be a more successful strategy for reforming social systems , in-between waves of structural change the system is left to re-orientate towards its client group. An example was the Flexner-initiated reform of US medical education which resulted in the closure of nearly half the medical colleges, an immediate enhancement in quality and efficiency of the system and future growth based on best institutional practices. However, short-sharp-shock reforms would probably initiate an NHS ,health care famine' with acute shortages and a health care crisis, because the NHS constitutes a ,subsistence economy' without any significant surplus of health services. The UK health care system must grow to generate a surplus before it can adequately be modernized. Efficient and rapid growth in health services could most easily be generated by stimulating provision outside the NHS, using mainly staff trained abroad and needs-subsidized ,item-of-service'-type payment schemes. Once there is a surplus of critically vital health services (e.g. acute and emergency provision), then radical modernization should rapidly improve the health service by a cull of low-quality and inefficient health care providers. [source]

A Note on Efficiency Wage Theory and Principal,Agent Theory

BULLETIN OF ECONOMIC RESEARCH, Issue 3 2006
Uwe Jirjahn
J41; J33; D82 Abstract Why are principal,agent models used in some circumstances and efficiency wage models in others? In this note, it is argued that efficiency wages provide incentives based on an evaluation of the agent's input, while the incentives analysed in principal,agent models rely on the agent's output. The choice between the two incentive schemes depends on the probability that the agent is caught shirking. Moreover, we demonstrate that a combination of input- and output-related elements provides stronger incentives than payment schemes based on merely one of these elements. However, the combination requires a more complex labour contract involving an increased cost of writing the contract. The interaction between this transaction cost and a hiring cost is analysed. [source]