Thesis advisor: S.J. Richard A. McGowan / This thesis will examine the free rider problem in a unique setting: how states compete over gambling revenues. As the economy tightens, states continue to look for revenue streams to supplement their already strained budgets. Gambling is an attractive option for many states, as it is a steady and reliable source of income each month. With appealing funds available, different states have intensified their competition, authorizing new casinos on neighboring state borders to entice out-of-state visitors. States receive money from these visitors but are not responsible for their social problems, which they bring back to their home states. This phenomenon is a modern incarnation of the free rider problem. This paper explores three main questions. To begin, does the gambling market expand with the introduction of a new state's gambling facilities? Next, are states able to successfully reclaim revenues? Lastly, what are the effects of changes in tax rates on state revenues? These questions are examined in two regions. First, the newly authorized slots in Pennsylvania are having a direct impact on the casinos in Atlantic City, NJ. Also, a variety of tax changes in the Midwest states of Illinois, Indiana, and Missouri is shifting revenues among these three states. The free rider problem relating to states and gambling will continue to be an important and relevant issue for years to come. / Thesis (BS) — Boston College, 2008. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Economics. / Discipline: College Honors Program.

This paper presents an empirical analysis of top executive compensation from intellectual capital perspective using data from US listed companies and aims to examine whether executives get appropriate compensation. I propose a pay-contribution compensation scheme and extend previous research on agency theory, by exploring how executive compensation contract design may be based on the firm’s intellectual capital (IC). Such features would serve the core purpose of compensation design, which is to create long-term firm value. But inappropriate compensation scheme cannot motivate individual ICs to contribute fully and deteriorate firm value eventually. I view CEO, CFO, COO, CMO, CSO, CTO, CHOs as individual intellectual capital of firms, and through examining key indicators from financial contribution, organizational contribution, relational contribution and growth contribution, I find that their total compensations, total incentive compensations and total cash compensations are not significant on their functions for all executives, implying that free rider problem may exist. I conduct two steps regression models: the first step is to reveal free-rider problem based on the significant relationship between executive compensation and his/her role contribution, and the second step is to examine whether executive compensations rewarded by his/her role contribution have significant influence on firm valuation. The outcome of model 1 shows that CEO and CSO have no free-rider problem, while CTO and CHO may have potential free-rider problem, CFO and CMO may have the risk of free-rider problem, and COO may have moderate free-rider problem. The outcome of model 2 shows that CEO and CFO compensation rewarded by role contribution have significant influence on firm valuation; COO, CMO and CHO compensation rewarded by role contribution have moderate influence on firm valuation; while CTO compensation rewarded by role contribution have little influence on firm valuation and CTO compensation rewarded by role contribution have no influence on firm valuation. My result is consistent with agency theory since free rider may cause executive inertia, reduce individual IC productivity, and impair firm value. The findings suggest that pay-contribution compensation contracts and remuneration schemes focus on different executive positions and strategic roles of individual intellectual capital to avoid free rider problem.

En el presente trabajo, el autor nos brinda una brillante perspectiva de los costos transaccionales y la problemática que los rodea en cuanto a la asignación de recursos y las reglas de responsabilidad que tenemos en nuestros ordenamientos legales. Con el motivo de dejar claro su planteamiento, el renombrado profesor Calabresi usa ejemplos empíricos para mostrar de qué manera se da la intervención gubernamental en la economía, cuando esta parece no poder regularse por sí misma. In the present paper, the author gives us a brighter perspective of transaction costs and the problems around them in terms of resource allocation and liability rules that we have in our legal systems. With the occasion to clarify its approach, the renowned Professor Calabresi uses empirical examples that show how government intervention in the economy occurs when this does not seem to regulate for itself.

Made available in DSpace on 2014-06-12T17:20:53Z (GMT). No. of bitstreams: 2 arquivo5956_1.pdf: 769946 bytes, checksum: cf65fb921a77d5f66e37bea44af90956 (MD5) license.txt: 1748 bytes, checksum: 8a4605be74aa9ea9d79846c1fba20a33 (MD5) Previous issue date: 2005 / O presente trabalho analisa o comportamento de moradores de uma comunidade carente da cidade do Recife, com o objetivo de verificar experimentalmente a ocorrência ou não do fenômeno descrito, na teoria econômica, como a hipótese do free rider. O autor elaborou uma situação-problema que simulava a obtenção de um bem público, o que era representado pela escolha econômica de aplicar determinada dotação inicial em um fundo público ou em um fundo privado de investimento. Os agentes foram abordados na própria comunidade e a amostra foi dividida em dois grupos de 20 jovens e dois de 20 adultos. Os resultados obtidos revelaram que os moradores da Comunidade do Pilar não agem precisamente de acordo com as previsões da hipótese do free rider, não obstante uma alta ocorrência de decisões pouco cooperativas 52% dos jovens doaram seus recursos num montante que não seria suficiente para adquirir os benefícios do bem público, enquanto entre os adultos essa porcentagem subiu para 60%. Além dos resultados quantitativos e qualitativos per se, esta dissertação contribuiu para um aprofundamento do método de pesquisa em um tipo de grupo amostral pouco explorado na literatura de Economia Experimental: agentes em precárias condições de sobrevivência, com pouco acesso ao mercado de trabalho formal, à renda, à educação, à saúde, ao saneamento básico

This study sought to explore the perceptions of social loafing held by post-graduate university students within a group work context. The study aimed to advance understanding of how such perceptions can impact group work endeavours. Specifically, the key tenets that guided the study were whether or not the participants had experienced the phenomenon of social loafing through the duration of their university careers; how prevalent it was; how the encounter had shaped their views on group work; how it impacted their motivational levels; whether they had personally engaged in social loafing or not; as well as how they dealt with social loafers within their groups. This purely qualitative study employed a phenomenological lens in deriving exploratory information from a purposive sample (eight post-graduate students enrolled in the University of Pretoria's Human Resource Management Department). The findings from the research illustrate that the whole sample had experienced social loafing within a group work context. What differed, were the subjective interpretations of the phenomenon held by the students. Students were readily able to provide specific examples and instances where they had been exposed to loafing by a peer or where they, themselves, had loafed. Students' applied various mechanisms to deal with loafers within their work groups, namely, direct confrontation; eliminating perceived loafers from in-group selection from the onset; peer review or evaluations/appraisals; as well complete conflict avoidance through no action at all. The presence of a loafer created feelings of frustration amongst most of the students. The phenomenon itself was more likely to occur when there was a lack of incentive or evaluation, disinterest in the topic or limited knowledge of the work content. Further, the larger the group size, the greater the likelihood of a loafer being present. From these findings it is evident that social loafing is common and leaves a lasting impression on those that have been exposed or engaged in the phenomenon. Recommendations include: the optimal size for a group work task be ideally set at 4 to 5 people; group work activities should have clearly defined goals and objectives; clear means of evaluation must exist to ensure that each group member's contribution can be appraised; prior exposure to the content of the task is important and group work should not take place before modular assessment; lecturers need to take on an active role in mitigating against loafing; realistic time frames for group task completion must be present; and increased focus on educating students on how to be constructive group members should be considered as part of a best practice group work approach. / Mini Dissertation (MCom)--University of Pretoria, 2016. / Human Resource Management / MCom / Unrestricted

Background: Especially important in the transition process is the role of the providers and parents shifting from that of a manager of health to more of a coach. In group work, as in healthcare management, there is the opportunity for social loafing to occur, which could impede one’s competence in performing the desired task. Social loafing is the reduction in motivation and effort when individuals work collectively compared with when they work individually. Specific to social loafing is the free rider effect —when a person lacks putting forth effort because they believe someone else will pick up the slack which has been demonstrated in parent-child and student-teacher relationships. Objective: In this study we examined the prevalence of social loafing as defined by whether youth report that they know how to perform specific transition readiness skills but report that others do the tasks for them (as opposed to doing it themselves). Design/Methods: We surveyed 161 youth from two different schools in South Central Appalachia about their transition readiness using anchors from the TRAQ with revised response categories. The response categories assessed 1) whether they know how to do the specific task or not and 2) whether youth perform the task themselves or if someone else does the task for them. Results: We were specifically interested in those who responded “No, someone else does it but I know how”. Of the 21 items on the TRAQ, the rate of endorsement of the “social loafing” response varied between 11% and 53%. For 14 of the 21 items, the rate of endorsement of the “social loafing” response was greater than 30%. Table 1 displays the rate of endorsement of the social loafing response for each TRAQ item. Conclusion(s): Our results demonstrate that although many youth “know” how to perform various transition related tasks, very frequently they allow someone else to perform the task for them. In order for transition to adulthood to be successful, youth should be challenged to accept responsibility for performing task with the support of adults—called scaffolding. This will enhance the youth’s competence and autonomy. Similarly, in healthcare settings, clinicians can implement a scaffolding approach to reduce social loafing and promote more autonomy and gain competence in managing their health.

Herbert Morris argues in his influential retributivist paper, "Persons and Punishment," that criminals deserve punishment because their actions represent an unfair distribution of benefits and burdens in society. The proper distribution of benefits and burdens is important, in part, to restore law abiding citizens’ confidence that others will follow the law. In this paper I show that Morris's argument for why criminals deserve punishment morally requires us to set up an institution of rehabilitation in addition to the institution of punishment. Such an institution is morally required because neither pure punishment systems nor punishment systems that incorporate quasi-rehabilitative aspects have ever worked to uphold the necessary confidence that Morris tells us law abiding citizens must have in order to protect the social order. Moreover, we cannot abandon Morris's appeal to the duty to maintain social order without also abandoning a plausibly Morrisian framework.

How should a company best allocate its spending between acquisition and retention? Under what condition should a company devote resources and money to analytics? The above questions are just examples of more general issues concerning many companies when managing their customer acquisition and retention programs. To answer the above questions, I will conduct a study on the allocation of financial resources between incentives that target different types of customers, and the allocation of resources between incentives and analytics spending. This research first distinguishes between customers and acquisition, between incentive and price discount, and between acquisition and retention. It then proposes a new concept, “free rider”, in a customer acquisition and retention context. Building on the free-rider concept, two mathematical models are formulated to examine the optimal allocation between acquisition incentive, retention incentive, and analytics spending. Closed-form solutions are reached for both models and the results are interpreted in the context of marketing practice. The conditions leading to different patterns of optimal solutions of analytics spending, acquisition incentives, and retention incentives are discussed. Specifically, the detailed conditions under which the optimal acquisition incentives is zero or non-zero, the optimal retention incentives is zero or non-zero, and the optimal analytics spending is zero or non-zero, are provided. Factors determining the ceiling for acceptable level of cost of analytics are also examined.

This dissertation consists of three essays studying the theory of dynamic contest. This analysis mainly focuses on how the outcome and the optimal design in a dynamic contest varies on contest technology, heterogeneous players, contest architecture, and bias instruments. The first chapter outlines the dissertation by briefly discussing the motivations, methods, and main findings in the following chapters. Chapter 2 considers a situation in which two groups compete in a series of battles with complete information. Each group has multiple heterogeneous players. The group who first wins a predetermined number of battles wins a prize which is a public good for the winning group. A discriminatory state-dependent contest success function will be employed in each battle. We found that in the subgame perfect Nash equilibrium (equilibria), the lower valuation players can only exert effort in earlier battles, while the higher valuation players may exert effort throughout the entire series of battles. The typical discouragement effect in a multi-battle contest is mitigated when players compete as a group. We also provide two types of optimal contest designs that can fully resolve the free-rider problem in group contests. Chapter 3 investigates optimal contest design with multiple heterogeneous players. We allow the contest designer to have one or multiple/mixed objectives, which includes the following parts: the total effort; the winner's effort; the maximal effort; and the winning probability of the strongest player. We provide a one-size-fits-all contest design that is optimal given any objective function. In the optimal contest, the designer will have one of the weaker players exhaust the strongest in the contest with infinite battles. We obtain the required conditions on different contest frameworks (e.g., all-pay auctions and lottery contests) and bias instruments (e.g., head starts and multiplicative bias). This means the contest designer has multiple alternatives to design the optimal contest. The last chapter investigates a situation where two players compete in a series of sequential battles to win a prize. A player can obtain certain points by winning a single battle, and the available points may vary across the battles. The player who first obtains predetermined points wins the prize. We fully characterize the subgame perfect Nash equilibrium by describing the indifference continuation value interval. We found that when two players are symmetric, they only compete in the separating battle. In the general case, we found that winning a battle may not create any momentum when the weight of the battle is small. A small enough adjustment of a battle's weight will not change both players' incentive to win the battle. Increasing (or decreasing) a battle's weight weakly increases (or weakly decreases) both players' incentive to win. / Doctor of Philosophy / A contest in economics is defined as a situation in which players exert positive effort to win a prize. The effort can be money, time, energy, or any resource that is used in a competition. The prize can be monetary or other perks from winning a competition. In this dissertation, we explore dynamic multi-battle contests where the winner is not decided by one single competition but by a series of sequential competitions. For example, the US presidential primary begins sometime in January or February and ends about mid-June and candidates will compete in different states during the time. In NBA finals, the winner is decided by a best-of-seven contest. The team that first wins four games becomes the champion. In the second chapter, we explore multi-battle group contest in which each group has multiple heterogeneous players. The group who first wins a certain number of battles wins a prize. The prize is a public good within the winning group so players in the winning group can enjoy the prize regardless their effort. We found that players with high prize valuation will be discouraged in earlier battles due to high expected effort in later battles. This may make high-value players only exert effort in later and more decisive battles. The low-value players will exert effort in earlier battles and will free rider on high-value players in later battles. We also provide the optimal contest design that can fully resolve the free-rider problem. In the optimal contest design, the designer should completely balance two groups in every battle. In the third chapter, we explore the optimal contest design in the multi-battle contests with multiple heterogeneous players. The contest designer can have one or multiple/mixed objectives. We found a "one size fits all" multi-battle contest design that is optimal for various objective functions. In the optimal contest design, the designer should give different advantages to the strongest player and one of the weaker players. More specifically, the weaker player is easier to win each battle, while the strongest player needs to win fewer battles. This overturns the conventional wisdom that the advantage should be only given to the weaker players. In the fourth quarter, we explore the multi-battle contest that in which each battle has a different weight, that is, some battles may more or less important than others. We found that when a battle's weight is small, players may feel indifference between winning or losing the battle. Therefore, winning such battles will not create any momentum, and players tend to give up those battles by exerting no effort. We also found that when we increase or decrease a battle's weight, if the adjustment is small, it will not change players' incentive to win a battle. However, if the adjustment is large enough, it will increase or decrease players' incentive to win in the same direction.

This thesis is composed of four chapters and addresses the contracting issue under strategic experimentation. The first chapter presents an overview of the thesis and introduces the strategic bandit model, which is commonly adopted in the other three chapters. The chapter also previews the main results and implications of the thesis. The second chapter discusses the contracting issue between a principal and a team of agents where the actions of agents are unobservable to the principal. The main contribution of this chapter is to fill the gap of strategic experimentation literature by introducing the free-rider problem in teamwork. The chapter first deals with the optimal hiring choice of the principal under perfect information. Since the belief of the state being good decreases if no one succeeds over time, the paper shows that the principal tends to hire fewer agents in response to the downward-adjusted posterior belief. When the principal can neither monitor the agents' actions nor distinguish the agents who succeed, this chapter shows the optimal incentivising contract consists of an upfront payment from the agents to the principal, a bonus to every agent conditioning on success and a stopping time. Under this contract, the principal can implement first-best experimentation and incentivise all agents to work until the optimal stopping time. The third and fourth chapters discuss the financial contracting issue in innovation where an innovator requires external funding from an investor. The third chapter adopts a \bad news" exponential bandit to study the financial contracting under adverse selection between the innovator and the investor. The innovator, owns the innovation project, is privately informed of either a high or low prior belief of the good state but seeks a large amount of external investment from the less-informed investor. Experimentation is conducted by the innovator using internal funding before the external investment. The posterior belief about the good state increases in the amount of internal funding if no bad news arrives during experimentation, but the project will be abandoned as long as bad news arrives. The chapter shows that the amount of internal funding can be used by the investor to separate the agents with different priors. Under the unique least-costly separating equilibrium, the high-prior innovator spends even more than the low-prior first-best internal funding in order to deter the low-prior one from mimicking, and the low-prior one remains at his first-best. This chapter enriches the financial experimentation literature by proposing internal funding as a novel signalling tool and establishing a Pareto dominating separating equilibrium. The fourth chapter studies a multi-stage innovation financing problem between an agent and an investor with asymmetric information on the progress of the project. The innovation is comprised of two stages where the agent needs to complete the first development stage in order to proceed to the second experiment stage. The model assumes that the completion of the first stage can be early or late following a binary distribution, and the arrival of success in the experimentation stage follows a "good news" exponential bandit. Each period, a fixed amount of investment is needed from the investor. However, the investor can not observe nor verify the project progress. The chapter shows that the optimal incentive-compatible contract consists of differential maximum funding periods in the event of early and late completion of the first stage respectively and subsequent bonuses to the investor conditioning on a success in the second stage. We prove that the first-best experimentation time is attainable as long as the bonus of the late completion exceeds that of the early completion, and the difference between the two bonuses should be confined within a certain range. In the extension, we consider the case when the first stage completion time is informative such that an early completion indicates a higher prior in the good state than the late completion. Under imperfect information, the agent has a stronger incentive to mimic the early completion if the first stage is completed late as a longer experimentation time will be granted according the first-best contract. The chapter proves that the first-best is still achievable under a similar bonus contract but the difference between the two bonuses becomes smaller. This chapter contributes to the experimentation financing literature including the information imperfectness on project progress and multi-stage spillover effects.