平狄克微观经济学GeneralEquilibriumandEconomicEfficiency幻灯片.ppt

Chapter 16 The Managers of Non-Profit Hospitals as Agents Are non-profit organizations more or less efficient than for-profit firms? 725 hospitals from 14 hospital chains Return on investment (ROI) and average cost (AC) measured The Managers of Non-Profit Hospitals as Agents Return on Investment 1977 1981 For-Profit 11.6% 12.7% Non-Profit 8.8% 7.4% The Managers of Non-Profit Hospitals as Agents After adjusting for differences in services: AC/patient day in non-profits is 8% greater than profits Conclusion Profit incentive impacts performance Costs and benefits of subsidizing non-profits must be considered Incentives in the Principal-Agent Framework Designing a reward system to align the principal’s and agent’s goals--an example Watch manufacturer Uses labor and machinery Owners’ goal is to maximize profit Machine repairperson can influence reliability of machines and profits Incentives in the Principal-Agent Framework Designing a reward system to align the principal’s and agent’s goals--an example Revenue also depends, in part, on the quality of parts and the reliability of labor High monitoring costs make it difficult to assess the repairperson’s work Incentives in the Principal-Agent Framework Small manufacturer uses labor and machinery to produce watches Goal is to maximize profits High monitoring costs keep owners from measuring the effort of the repairperson directly The Revenue from Making Watches Poor Luck Good Luck Low Effort (a = 0) $10,000 $20,000 High Effort (a = 1) $20,000 $40,000 Incentives in the Principal-Agent Framework Designing a reward system to align the principal’s and agent’s goals--an example Repairperson can work with either high or low effort Revenues depend on effort relative to the other events (poor or good luck) Owners cannot determine a high or low effort when revenue = $20,000 Incentives in the Principal-Agent Framework Designing a reward system to align the principal’s and agent’s goals--an example Repairperson’s goal is to maximize w