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Conflicting Incentives (conflicting + incentive)
Selected AbstractsMedicare and Medicaid: Conflicting Incentives for Long-Term CareTHE MILBANK QUARTERLY, Issue 4 2007DAVID C. GRABOWSKI The structure of Medicare and Medicaid creates conflicting incentives regarding dually eligible beneficiaries without coordinating their care. Both Medicare and Medicaid have an interest in limiting their costs, and neither has an incentive to take responsibility for the management or quality of care. Examples of misaligned incentives are Medicare's cost-sharing rules, cost shifting within home health care and nursing homes, and cost shifting across chronic and acute care settings. Several policy initiatives,capitation, pay-for-performance, and the shift of the dually eligible population's Medicaid costs to the federal government,may address these conflicting incentives, but all have strengths and weaknesses. With the aging baby boom generation and projected federal and state budget shortfalls, this issue will be a continuing focus of policymakers in the coming decades. [source] Why do Shareholders Allow Their Managers to be Gatekeepers in Corporate Control Contests?,ASIA-PACIFIC JOURNAL OF FINANCIAL STUDIES, Issue 6 2008Kyung Suh Park Abstract This paper formulates a theoretical model to explain why target shareholders under corporate control contests allow their managers to play the role of a gatekeeper despite the conflicting incentive of the managers to resist takeover attempts that might increase firm value. The paper claims that sometimes the existence of a manager with a conflicting goal can contribute to enhancing the welfare of his shareholders under a corporate control contest where bidders have the choice of takeover methods. We set up a game-theoretical model and derive a separating equilibrium where bidders with higher synergy prefer a tender offer to a merger, and the bidders are forced to pay higher takeover premium in a hostile tender offer due to the existence of informed target managers who can make counteroffers under a merger deal. [source] Corporate Investment Incentives and Accounting-Based Debt Covenants,CONTEMPORARY ACCOUNTING RESEARCH, Issue 4 2003Alan V. S. Douglas Abstract This paper studies the conditions under which accounting-based debt covenants increase firm value in a setting that incorporates the conflicting incentives of shareholders, bondholders, and managers. We construct a model in which debt is needed to discipline managerial investment decisions despite endogenous compensation contracts. We show that accounting covenants increase value when (1) debt serves as a credible commitment to penalize poor investment decisions; (2) the firm faces other (exogenous) sources of uncertainty that can make debt risky despite good investment decisions; and (3) accounting information serves as a contractible proxy for firm's economic performance. In these circumstances, accounting covenants ensure that shareholders do not offer compensation schemes that would encourage bondholder wealth expropriation when the debt becomes risky. A covenant specifying a required level of accounting performance provides additional bondholder power when performance is low. An accounting-based dividend covenant allows a disbursement to maintain investment incentives when performance is high without allowing dividend-based expropriation. The optimal covenants depend on the reliability of accounting information, and the interaction between accounting performance and the different incentive conflicts provides new insight into the empirical literature on accounting-based covenants. [source] Alliances, Domestic Politics, and Leader Psychology: Why Did Britain Stay Out of Vietnam and Go into Iraq?POLITICAL PSYCHOLOGY, Issue 6 2007Stephen Benedict Dyson In the Vietnam and Iraq conflicts, British Prime Ministers were asked to contribute forces to an American-led war that was deeply unpopular in the United Kingdom. This presented Harold Wilson and Tony Blair with conflicting incentives and constraints: to support their senior ally or to make policy based upon domestic considerations. Why did Harold Wilson decline to commit British forces while Tony Blair agreed to do so? With situational factors generating conflicting predictions, I argue that investigation of individual-level variables is necessary. In particular, I suggest that leaders vary systematically in their willingness to subordinate the concerns of constituents to strategic imperatives, and that introducing the leadership style categories of "constraint challenger" and "constraint respecter" can make more determinate the linkage between domestic politics and strategic concerns. [source] Medicare and Medicaid: Conflicting Incentives for Long-Term CareTHE MILBANK QUARTERLY, Issue 4 2007DAVID C. GRABOWSKI The structure of Medicare and Medicaid creates conflicting incentives regarding dually eligible beneficiaries without coordinating their care. Both Medicare and Medicaid have an interest in limiting their costs, and neither has an incentive to take responsibility for the management or quality of care. Examples of misaligned incentives are Medicare's cost-sharing rules, cost shifting within home health care and nursing homes, and cost shifting across chronic and acute care settings. Several policy initiatives,capitation, pay-for-performance, and the shift of the dually eligible population's Medicaid costs to the federal government,may address these conflicting incentives, but all have strengths and weaknesses. With the aging baby boom generation and projected federal and state budget shortfalls, this issue will be a continuing focus of policymakers in the coming decades. [source] | ||||||||||