This thesis serves as an introduction and overview of the broad and closely related fields of mechanism design, contract theory, and information economics. Each chapter is intended to provide a self-contained guide to the particular area of application -- examples include adverse selection, moral hazard, and auctions. The reader should benefit from the thesis in two ways: by understanding the general notions of the revelation principle, incentive compatibility, and individual rationality from the mechanism design theory as well as by examining the particular information asymmetry models in the individual areas. Powered by TCPDF (www.tcpdf.org)

Thesis (M.Com. (Taxation))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Accountancy, 2014. / It is commonly understood that it is the people within the organisation that hugely affect the efficiency and work environment, which ultimately brings about greater profitability and value. With this in mind, corporate entities continue to ensure that they are attracting and retaining high performing individuals to their organisations with the view of generating greater value for shareholders. The question then arises as to how to attract key individuals to an organisation and keep those individuals. The use of share incentive plans is an established tool implemented by corporates which incentivises employees to remain at an organisation for an extended term while at the same time, attempts to align the interest of the employee with that of the shareholders. Share incentive plans provide one such solution of achieving both these objectives, but how practical is it to implement such an incentive plan in light of the constantly changing tax landscape. Against this commercial driver to attract and retain employees is the apparent mistrust by Treasury and SARS of the use of share plans to incentive employees which is considered by Treasury and SARS as a salary conversion plan with the objective of obtaining a tax advantage. This paper will consider the practical issues faced by corporates trying to implement share incentive schemes to secure the employee’s income earning structure for a prolonged period and aligning the interests of the employee with the shareholders, by considering the tax influencers behind share incentive plans which are being indirectly moulded by the tax legislation, drafted by National Treasury and implemented by SARS. This report will consider the taxation of income earned qua employee versus the income qua shareholder. In order to consider this the paper will attempt to determine where the line currently rests between employee and shareholder, by providing an outline of the current legislation around share plans and some of the commonly seen share schemes implemented in practice. This paper will then consider the direction that this line is moving, if at all, by considering the proposed changes to the legislation as drafted by Treasury and lastly consider how these proposed legislative changes impacts corporates who are trying to implement a long term share incentive plan.

O objetivo do presente estudo foi verificar se há associação entre o incentivo dos pais (IP) com os níveis de atividade física (AF) dos escolares. Trata-se de um estudo de caso, com método descritivo e correlacional tendo abordagem quantitativa e corte transversal. A amostra foi composta por escolares de 6 a 11 anos de idade. Os níveis de AF dos escolares foram avaliados através de acelerômetros. O IP foi avaliado por meio de perguntas. O nível socioeconômico foi avaliado por meio de questionário. Foram medidos a estatura, o peso, e o perímetro da cintura das crianças e seus respectivos pais. O Índice de massa corporal foi calculado posteriormente. Foram utilizadas análises descritivas e de frequência. Possíveis associações foram testadas através do teste de Quiquadrado de Pearson. Regressões logísticas foram utilizadas para verificar as associações entre a AF e o IP. Também foram verificadas a confiabilidade referente as perguntas do IP. Nossos resultados apontaram haver associação entre o IP intangível e a AF dos escolares. Cinquenta por cento das crianças cumpriram com as recomendações de AF. Houve uma baixa ocorrência de IP. Além disso, o incentivo intangível foi o mais reportado por aqueles que incentivavam seus filhos. Os meninos apresentaram maior probabilidade de receberem incentivo tangível e intangível dos pais e de praticar 60min de atividade física moderada/vigorosa (AFMV). As crianças de classe baixa apresentaram uma maior probabilidade de atingir os 60min de AFMV. Conforme a idade das crianças avança aumenta o IP, entretanto, a força de correlação observada entre as variáveis foi muito fraca. Os modelos de regressão revelaram que os escolares que recebiam IP, ser menino e ser de classe baixa tinham maior prevalência de cumprir com as recomendações de AF quando comparados aos que não recebiam incentivo, as meninas e aos escolares que pertenciam a classe média. O IP mostrou-se influenciar nos níveis de AF dos escolares. Metade das crianças avaliadas praticam em média 60min de atividade física AFMV por dia, cumprindo assim com as recomendações de atividade física propostas pela OMS. De uma forma geral os pais pouco incentivam seus filhos(as) a praticarem atividade física, entretanto dos pais que incentivam houve uma maior ocorrência do incentivo intangível. Nosso estudo evidenciou que os meninos são mais incentivados que as meninas independentemente do tipo de incentivo e os pais. Observamos também que conforme a idade o IP aumenta. Nossos resultados corroboram com a literatura aonde as crianças de idade superior apresentam associações fracas com o incentivo. Ressaltamos a importância do IP para a prática de atividade física dos filhos uma vez que os nossos modelos de regressão revelaram haver associação entre o IP e a AFMV dos escolares. As crianças que recebiam IP apresentaram maior prevalência de cumprir com as recomendações de atividade física quando comparadas aos seus pares que não recebiam incentivo. Conclui-se que o IP é um fator que pode influenciar nos níveis de AFMV dos escolares. Além disso outros fatores determinante como o nível socioeconômico e as barreiras merecem ser explorados para melhor compreender essa relação. / The objective of the present study was to verify if there is an association between the parents' incentive (PI) and the levels of physical activity (PA) of the students. It is a case study, with descriptive and correlational method having quantitative and cross-sectional approach. The sample consisted of students from 6 to 11 years of age. Schoolchildren's PA levels were assessed using accelerometers. PI was evaluated through questions. The socioeconomic level was evaluated through a questionnaire. The height, weight, and waist circumference of the children and their respective parents were measured. Body mass index was calculated later. Descriptive and frequency analyzes were used. Possible associations were tested using the Pearson Qui-square test. Logistic regressions were used to verify the associations between PA and PI. The reliability of the PI questions was also checked. Our results showed an association between the intangible PI and the PA of the students. Fifty percent of the children complied with the recommendations of PA. There was a low occurrence of PI. In addition, the intangible incentive was the most reported by those who encouraged their children. Boys were more likely to receive tangible and intangible encouragement from their parents and to practice 60 minutes of moderate / vigorous physical activity (MVP). Low-grade children were more likely to achieve 60 min MPV. As the age of children progresses, PI increases, however, the correlation force observed between the variables was very weak. The regression models revealed that schoolchildren who received PI, being a boy and being low-class had a higher prevalence of complying with the recommendations of PA when compared to those who received no incentive, girls and schoolchildren belonging to the middle class. The PI was shown to influence the students' PH levels. Half of the evaluated children practice on average 60min of MPV physical activity per day, thus fulfilling the recommendations of physical activity proposed by the WHO. In general, the parents do not encourage their children to practice physical activity, however, from the parents who encourage it, there is a greater occurrence of the intangible incentive. Our study showed that boys are more encouraged than girls regardless of the type of incentive and the parents. We also observe that according to age the PI increases. Our results corroborate with the literature where children of older age present weak associations with the incentive. We emphasize the importance of PI for the physical activity of the children since our regression models revealed an association between PI and MVP of schoolchildren. Children who received PI had a higher prevalence of complying with physical activity recommendations when compared to their peers who received no incentive. It is concluded that PI is a factor that can influence the levels of MVP of schoolchildren. In addition other determining factors such as socioeconomic status and barriers deserve to be explored to better understand this relationship.

Technology has greatly impacted how economic agents interact in various markets, including transportation and online display advertising. This calls for a better understanding of some of the key features of these marketplaces and the development of fundamental insights for this class of problems. In this thesis, we study markets for which spatial and incentive considerations are crucial factors for their operational and economic success. In particular, we study pricing and staffing decisions for ride-hailing platforms. We also consider the contract design problem faced by Ad Exchanges when buyers' strategic behavior and inherent business constraints limit these platforms' decisions. Firstly, we investigate the pricing challenges of ride-hailing platforms and propose a general measure-theoretical framework in which a platform selects prices for different locations, and drivers respond by choosing where to relocate based on prices, travel costs, and market congestion levels. Our results identify the revenue-maximizing pricing policy and showcase the importance of accounting for global network effects. Secondly, we develop a queuing approach to study the link between capacity and performance for a service firm with spatial operations. In a classical M/M/n queueing model, the square root safety (SRS) staffing rule balances server utilization and customer wait times. By contrast, we find that the SRS rule does not lead to such a balance in spatial systems. In these settings, a service firm should use a higher safety factor, proportional to the offered load to the power of 2/3. Lastly, motivated by the online display advertising market where publishers frequently use transaction-contingent fees instead of up-front fees, we study the classic sequential screening problem and isolate the impact of buyers' ex-post participation constraints. We characterize the optimal selling mechanism and provide an intuitive necessary and sufficient condition under which screening is better than pooling.

We consider a pure exchange economy with asymmetric information where individual behavior exhibits ambiguity aversion along the line of maximin expected utility decision making. For such economies we introduce different notions of maximin value allocations. We also introduce a strong notion of (maximin) incentive compatibility. We prove existence and incentive compatibility of the maximin value allocation, when the economy's state space is either finite or non-finite. In the latter case, we provide two different existence results: assuming first countable and then uncountable infinitely many states of nature of the world. We conclude that unlike the Bayesian value allocation approach, incentive compatibility is related to efficiency rather than to direct exchange of information.

abstract: Science is a formalized method for acquiring information about the world. In recent years, the ability of science to do so has been scrutinized. Attempts to reproduce findings in diverse fields demonstrate that many results are unreliable and do not generalize across contexts. In response to these concerns, many proposals for reform have emerged. Although promising, such reforms have not addressed all aspects of scientific practice. In the social sciences, two such aspects are the diversity of study participants and incentive structures. Most efforts to improve scientific practice focus on replicability, but sidestep issues of generalizability. And while researchers have speculated about the effects of incentive structures, there is little systematic study of these hypotheses. This dissertation takes one step towards filling these gaps. Chapter 1 presents a cross-cultural study of social discounting – the purportedly fundamental human tendency to sacrifice more for socially-close individuals – conducted among three diverse populations (U.S., rural Indonesia, rural Bangladesh). This study finds no independent effect of social distance on generosity among Indonesian and Bangladeshi participants, providing evidence against the hypothesis that social discounting is universal. It also illustrates the importance of studying diverse human populations for developing generalizable theories of human nature. Chapter 2 presents a laboratory experiment with undergraduates to test the effect of incentive structures on research accuracy, in an instantiation of the scientific process where the key decision is how much data to collect before submitting one’s findings. The results demonstrate that rewarding novel findings causes respondents to make guesses with less information, thereby reducing their accuracy. Chapter 3 presents an evolutionary agent-based model that tests the effect of competition for novel findings on the sample size of studies that researchers conduct. This model demonstrates that competition for novelty causes the cultural evolution of research with smaller sample sizes and lower statistical power. However, increasing the startup costs to conducting single studies can reduce the negative effects of competition, as can rewarding publication of secondary findings. These combined chapters provide evidence that aspects of current scientific practice may be detrimental to the reliability and generalizability of research and point to potential solutions. / Dissertation/Thesis / Doctoral Dissertation Anthropology 2018

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Experimental willingness to pay (WTP) studies can be classified as hypothetical or non-hypothetical. In a hypothetical study, such as conjoint analysis, a subject does not need to make a real economic commitment. In contrast, in a non-hypothetical task such as in experimental auctions, a subject may need to actually buy the product. Subjects in hypothetical studies tend to overstate their true WTP. Consequently, researchers need to correct hypothetical values to obtain reliable WTP estimates. Recently, incentive-aligned and cheap talk approaches have been proposed as ways to correct for hypothetical bias. In a hypothetical task, a cheap talk script explicitly reminds the subject about the hypothetical nature of the task and its expected consequences. In an incentive-aligned task (non-hypothetical), subjects are randomly selected to physically buy the product. The objective of our study is to assess and compare the reduction of hypothetical bias in consumers’ willingness to pay for novel products by applying a generic, short, and neutral cheap talk script in a retail setting. To accomplish this objective, we employ non-hypothetical, hypothetical, and hypothetical with cheap talk treatments in our experimental design. We conducted our experimental retail study using conjoint analysis and open-ended elicitation mechanisms, utilizing Becker DeGroot Marshak (BDM) mechanism for the incentive-aligned treatments. Consistently in both elicitation mechanisms, using seemingly unrelated and random-effect Tobit techniques, we find that our cheap talk script is effective in eliminating the hypothetical bias. As expected, the hypothetical WTP values are significantly higher than the non-hypothetical values but the hypothetical values with cheap talk are not significantly different from incentive-aligned or non-hypothetical estimates. In addition, we find that open-ended estimates are significantly higher than conjoint analysis estimates and that emotions and familiarity can have significant impacts on WTP estimates.

Problem: Although performance measurement systems (PMSs) in firms to a large extent regard motivation of the employees, motivation theory is rarely used as frame-work to study the use and implications of PMS. The starting point of our identified problem is the narrow theoretical framework used in prior research of formulation of PMS in firms, when only relying on agency theory. We consider the present conceptions used as a foundation for the results in theoretical and empirical research of PMS are a barrier for more efficient governance control in firms. Therefore we ask if agency theory alone solid enough as a framework to capture the complex behavioural aspects of PMS? Or does an incorporation of motivation theory extend the under-standing of the use of PMS in firms? The answer has got important practical implications for all firms characterised by the separation of ownership and control. This brings us to the question: When evaluating and rewarding employees, which aspects are crucial to consider when formulating PMS in order to maximise the value of the firm? Purpose: The purpose of this thesis is to extend the understanding of the use of PMSs in banks. Contrary to prior research in this field, our purpose is to extend the conceptual framework by incorporating motivation theory extensively when analysing the use of PMS. In addition the results of this study are intended to give practical indications from a firm value maximizing perspective of which aspects that are crucial when formulating a PMS. Method: A qualitative method has been chosen to collect empirical data to our study. We have conducted interviews with our respondents working in the two banks. Mo-reover from our theoretical and empirical the conclusions are drawn in line with the approach of abduction. Conclusion: From what we have seen in our study there is no absolute answer, since there are many contingencies which affects how a PMS should be adapted to an organisation. However, due to four numbers of reasons we have come to the conclusion that the use of one atomistic measurement system, together with a profit-sharing system, is to prefer where all employees are rewarded equally.

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