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Topic: Perverse incentive

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	Perverse Incentives and their Removal or Mitigation
		Perverse incentives emanate from policies or practices that induce unsustainable behavior that destroys biodiversity, often as unanticipated side effects of policies designed to attain other objectives.
		Work on perverse incentive measures, and on ways and means to remove or mitigate their negative impacts on biological diversity, is also included in the programme of work on incentive measures, adopted by the Conference of the Parties at its fifth meeting in 2000.
		Further to this request, and based on background documentation prepared by the Secretariat, proposals were developed by the second workshop on incentive measures for the conservation and sustainable use of biological diversity, held in Montreal on 3-5 June 2003 with support of the government of The Netherlands.
	www.cbd.int /incentives/perverse.shtml (508 words)

	Incentive - Wikipedia, the free encyclopedia
		Since human beings are purposeful creatures, the study of incentive structures is central to the study of all economic activity (both in terms of individual decision-making and in terms of co-operation and competition within a larger institutional structure).
		Personal incentives are essential to understanding why a specific person acts the way she does, but social analysis has to take into account the situation faced by any individual in a given position within a given society—which means mainly examining the practices, rules, and norms established at a social, rather than a personal, level.
		The perverse incentives created by the availability of option (2) have been blamed for many of the falsified earnings reports and public statements in the late 1990s and early 2000s.
	en.wikipedia.org /wiki/Incentive (1007 words)

	Perverse incentive - Wikipedia, the free encyclopedia
		A perverse incentive is a term for an incentive that has the opposite effect of that intended.
		Paying the executives of corporations proportionately to the size of their corporation is intended to encourage them to grow their companies by growing the bottom line (and not their earnings per share).
		When it is illegal to sell to children but legal to sell to adults, drug dealers have an incentive to refuse to sell to children.
	en.wikipedia.org /wiki/Perverse_incentive (775 words)

	COP Decisions
		Consequently, the identification of perverse incentives resulting from specific policies and practices is often difficult, as their extent may crucially depend on the design and degree of implementation and enforcement of other policies, and on other socio-economic root causes.
		Perverse incentives are often difficult to detect, because the negative impacts on biodiversity are usually an indirect by-product of policies aiming at other goals, and because they may result from an intricate interaction between different policies or practices.
		For instance, the incentive of target groups not to comply with the regulation may be especially high if the policy generating the perverse incentive remains in place unchanged. Therefore, awareness‑raising, transparency and stakeholder involvement are important elements of effective regulatory policies to mitigate perverse incentives.
	www.cbd.int /decisions/default.aspx?m=COP-07&id=7755&lg=0 (3626 words)

	Liberal Democrats : Fare rises to tackle overcrowding perverse incentive - Carmichael
		Liberal Democrats : Fare rises to tackle overcrowding perverse incentive - Carmichael
		Fare rises to tackle overcrowding perverse incentive - Carmichael
		Raising fares to tackle overcrowding is a perverse incentive."
	www.libdems.org.uk /transport/story.html?id=10466 (267 words)

	Incentive Measures for Conserving Freshwater Ecosystems: Current, emerging and potential incentive measures for ... (Site not responding. Last check: 2007-10-03)
		In Australia today a wide range of financial and other incentive measures are available to encourage private landholders to manage their freshwater wetlands and other natural resources for long-term sustainability and with the goal of retaining the functions, services and benefits that these ecosystems provide.
		Some of these incentives are targeted specifically toward conserving wetlands for their biodiversity values, while others are part of a broader range of 'landcare' and natural resource management measures.
		Each incentive measure considered in this section, is categorised according to their mode of operation (as outlined in section 2.6), meaning whether they seek to facilitate, induce or compel changes in wetland management behaviour by private landholders.
	www.deh.gov.au /water/policy/incentive/chapter3-1.html (746 words)

	[No title]
		Perverse incentives emanate from policies or practices that induce unsustainable behavior that destroys biodiversity, often as unanticipated side effects of policies designed to attain other objectives.
		Work on perverse incentive measures, and on ways and means to remove or mitigate their negative impacts on biological diversity, is also included in the programme of work on incentive measures, adopted by the Conference of the Parties at its fifth meeting (Decision V/15).
		Further to this request, proposals were developed by the second workshop on incentive measures for the conservation and sustainable use of biological diversity, held in Montreal on 3-5 June 2003 with support of the government of The Netherlands.
	www.biodiv.org /programmes/socio-eco/incentives/perverse.asp (903 words)

	Incentive Measures for Conserving Freshwater Ecosystems: 3.3.14 Removal of perverse tax incentives (Site not responding. Last check: 2007-10-03)
		A third perverse incentive arises when property is purchased for the primary purpose of conservation.
		Win-win incentive as it reduces the transfer from taxpayers to landowners from which reduced environmental benefits are the direct outcome.
		Where taxation incentives are operating to encourage wetland degradation or destruction, and are found to be contrary to the best interests of society (in a triple bottom line sense), they should be removed as soon as possible.
	www.deh.gov.au /water/policy/incentive/chapter3-3-14.html (801 words)

	Intuitions about penalties and compensation in the context of tort law
		Incentive is absent because of the insurance and the secrecy.
		Those who rejected the incentive argument generally felt that fines should be based on the facts of the case, what happened in the past, or the need for compensation, not on effects in the future.
		Compensation is provided even when the incentive effects of providing it are harmful in the long run, as in the case of vaccines (clearly) or (only a little less clearly) medical specialties such as obstetrics which are losing practitioners because of frequent lawsuits.
	www.sas.upenn.edu /~baron/pun.html (6650 words)

	From here to perversity? \| healthmatters magazine
		A perverse incentive occurs where the design of a system or organisation incorporates incentives for actors to behave in ways which the system’s designers do not want: a sort of shooting oneself in the organisational foot.
		Such incentives occur in the social care sector too; it is not rational for a commercial residential home to try to rehabilitate a resident and thereby lose a customer.
		Since such incentives largely spring from the erection of organisational barriers and the use of quantitative data to govern transactions between the resulting sections and to measure their performance, perverse incentives are likely to multiply along with such practices.
	www.healthmatters.org.uk /issue7/perversity (732 words)

	AskMe: Has welfare reform worked? (Site not responding. Last check: 2007-10-03)
		The problem it was trying to solve was that there was a "perverse incentive" in the old system against work, since NOT working paid just as well as working.
		The theory of "perverse incentives" means that the government should not have programs that encourage socially undesirable results, such as not working.
		For example, welfare benefits go up with each additional child, so there's a "perverse incentive" to have more children when one is on welfare (although opponents would say that the additional benefit amount does not cover the additional costs).
	www.issues2000.org /AskMe/welfare.htm (414 words)

	Will fair share adjustment for shared parenting and visitation lead to more intense argument over the amount of ...
		If such perverse incentives exist, they are not the fault of credit against actual child support for time children spend with the paying parent.
		If the incentive to fight against visitation and shared parenting is assumed to be in proportion to the loss of child support, it is reasonable to want to know how great that loss will be in relation to various parenting arrangements.
		Having made these assumptions, we can conclude that if the perverse incentives exist when using a particular guideline, they would not be the result of applying a fair share method of crediting for visitation time.
	www.geocities.com /capitolhill/5910/cross_effect/effect1.html (7885 words)

	Committee on Ways and Means, Subcommittee on Human Resources, 3-20-97 Testimony
		Two criticisms of the current incentive payment structure are that (1) it focuses only on comparing collections to the cost of making them, while ignoring measures such as paternity and support order establishment, and (2) states currently receive a minimum level of incentive payments regardless of their performance.
		Instead of making incentive payments to localities and states that collected support payments on another state's behalf, the federal government made the incentive payments directly to the states and each state was required to pass incentive payments through to local CSE agencies if those agencies were financially liable for CSE operating costs.
		Since incentive payments are designed to encourage program development, the Commission on Interstate Enforcement's 1992 report, President Clinton 1994 welfare reform package, and many bills introduced in Congress during the early 1990s proposed that the incentive payment system be based on performance.
	waysandmeans.house.gov /Legacy/humres/105cong/3-20-97/3-20fear.htm (7011 words)

	Answers to End-Of-Chapter Questions (Site not responding. Last check: 2007-10-03)
		A perverse incentive is an incentive to use goods in a manner that doesn't reflect the cost to society.
		The perverse incentive above is caused by the fact that people with private health insurance or Medicare or Medicaid do not see the real costs of health care.
		If people are inherently bad, then the profit incentives offered by capitalism may be the only way to induce them to act in a socially desirable way.
	www.wright.edu /~rfichten/syllabi/ec201/ec201mat/chap0039/3906qa.htm (1303 words)

	D0202052 Order Implementing Cost Recovery Allocation of CA Dept. of Water Resources Revenue Requirements
		PGandE believes that such a perverse incentive to minimize the net short is avoided if utilities are held to their adopted allocation percentages, and true-ups of allocation percentages to reflect utilities' actual net short positions are not permitted.
		We are also concerned that such an hourly true-up would provide perverse incentives for the utilities to game the operation of their URG in order to shift high-priced DWR purchases to other utilities.
		Such a perverse incentive to minimize the net short is avoided if utilities are held to their adopted allocation percentages, and true ups of allocation percentages to reflect utilities' actual net short positions are not permitted.
	www.cpuc.ca.gov /PUBLISHED/FINAL_DECISION/13446-08.htm (3139 words)

	[No title]
		Basic Financial Incentives The revenue per contact that the specialists receive is the same for each specialist in a given month.
		Under contact capitation, the predominant incentive for the specialist is to take referrals and then care for each patient as efficiently as possible.
		The influence of incentives to deny or postpone care should be offset by ethical imperatives and the incentive to provide high-quality care in order to compete successfully for future referral volume.
	www.ama-assn.org /ama/upload/mm/cmsrpt1a01doc.doc (2697 words)

	ICTSD - BRIDGES Trade BioRes
		The proposals were forwarded from the second Workshop on Incentive Measures for the Conservation and Sustainable Use of Components of Biological Diversity, held in Montreal 3-5 June 2003.
		During the discussions, however, Argentina preferred to only focus on perverse subsidies, whereas an environmental NGO highlighted the need to clearly identify perverse subsidies as undermining biodiversity conservation and sustainable use.
		Within the context of the CBD, a perverse incentive has been identified as a policy or practice that encourages resource uses leading to the degradation of biological diversity, as an unintended side effect in the design of the subsidy.
	www.ictsd.org /biores/03-11-14/story3.htm (524 words)

	Economic incentives perverse to the conservation of biodiversity (Site not responding. Last check: 2007-10-03)
		Economic incentives perverse to the conservation of biodiversity
		It is in this way that economic incentives designed to produce increases in farm production, the adaptation of lands, or any other type of development activity, may also be promoting the degradation or overexploitation of biological resources.
		The central objective of the study is to identify such incentives and propose modifications to mitigate or eliminate their negative effect on the offer levels relating to the conservation of biodiversity.
	www.humboldt.org.co /ingles/en-pol-perversos.htm (196 words)

	Ontario Clean Air Alliance: What's New (Site not responding. Last check: 2007-10-03)
		It also provides that he's entitled to a long-term incentive plan package of $843,500 if he helps bring about corporate results, which you and I both know to mean corporate profits.
		What we have in place here is a perverse incentive plan that rewards the president for selling a dirtier plant and punishes him if he sells a cleaner plant.
		It has led to unprecedented debt reduction that you were never able to achieve when you were in charge, or that the NDP were ever able to achieve, of about $3 billion over the last two years.
	www.cleanair.web.net /whatsnew/hansard.html (680 words)

	SSRN-The Effectiveness and Constitutionality of State Tax Incentive Policies for Locating Businesses: A Simple Game ...
		Namely, states face an incentive structure akin to the so-called "prisoners dilemma," in which individually rational behavior is nonetheless collectively irrational.
		The analysis developed below, however, demonstrates that because of the perverse incentive structure that states have to enact tax incentive programs for mobile businesses, state political processes cannot ordinarily be expected to remedy the problem.
		The existence of a suspect legislative incentive structure thus reverses the presumption of constitutionality that courts ordinarily accord tax classifications, with the implications that courts would reject the constitutionality of many state incentive programs.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=236714 (662 words)

	Purdue prof says hockey rule changes miss the goal
		Abrevaya is most interested in the incentive effects of the changes for teams.
		"There is a perverse incentive for teams to play to reach overtime," he says.
		A rule change prior to the 1999-2000 season, which changed the way that teams were awarded points in overtime games, provides a natural experiment to test the reaction of teams to a change in playoff structure.
	news.uns.purdue.edu /UNS/html4ever/021209.Abrevaya.hockey.html (643 words)

	Perverse Incentives On Digg » Publishing 2.0
		There’s a perverse incentive here: Diggers who vote early on stories that become wildly popular become more “reputable” in the Digg system.
		Wow, a perverse incentive indeed, especially in a system engaged in a life or death struggle against gaming.
		I don’t think Digg is headed for a crash, but if their war on gaming forces them to remove many of the incentives from the system (e.g.
	publishing2.com /2007/03/01/perverse-incentives-on-digg (785 words)

	De Novo: A Malpractice Morass
		These same concerns emerge in the context of legal malpractice litigation when attorneys later sue co-counsel for malpractice in relation to their lapse in exercising the fiduciary duties owed to a common client.
		Perversely, Hunton, if discovering an oversight by another firm, would stand to gain most by not rectifying the mistake.
		Because Hunton stands to gain from malpractice litigation against a competitor, there is a perverse incentive to allow errors to occur.
	www.blogdenovo.org /archives/000906.html (854 words)

	BBC News \| SCOTLAND \| More pay for overworked doctors
		We are hopeful that this agreement will remove the perverse incentive that previously existed to force junior doctors to work extremely long hours
		"This contract will provide a strong financial incentive for NHS trusts to reduce the hours worked by their doctors and will ensure that the more a doctor works, the more he or she is paid," she said.
		She said the Scottish Executive had worked in partnership with the Scottish Junior Doctors' Committee (SJDC), Implementation Support Group (ISG) and NHS trusts to ensure the contract was implemented successfully.
	news.bbc.co.uk /1/hi/scotland/1050637.stm (476 words)

	The Saskatchewan Soil Conservation Association's (SSCA) (Site not responding. Last check: 2007-10-03)
		In other words, in an effort to receive credit for the carbon that farmer's store, the proposals create a perverse incentive to move offsets from a valueless pool to the pool that receives value.
		This perverse incentive (perverse in that it motivates a reduction in stored carbon rather than the maintenance of stored carbon) is eliminated in the system the SSCA proposes.
		These multiple pool proposals are also an incentive to delay adoption and use of BMPs that create agricultural soil sinks and the associated offsets.
	ssca.usask.ca /positions/offset_submission_paper.html (2058 words)

	Newmark's Door: Prof. Andrew Gelman's comment on my Katrina post (Site not responding. Last check: 2007-10-03)
		He notes that such perverse incentives are not limited to conservative politicians.
		The perverse incentive for conservative politicians is limited by two forces.
		But for the liberal perverse incentive, on the other hand, there is a potentially significant force intensifying it.
	newmarksdoor.typepad.com /mainblog/2005/09/prof_andrew_gel.html (1787 words)

	Effective Risk Management Requires Awareness of Perverse Incentives (Site not responding. Last check: 2007-10-03)
		But incentive problems can complicate the task of risk management and, in some cases, can expose society to a downward spiral of increasing risk.
		In the savings and loan crisis, deposit insurance gave insolvent thrifts an incentive to "go for broke." A bankrupt firm could maximize its value through speculation rather than hedging, that is, by increasing risk instead of decreasing it.
		These perverse incentives can include the problem of correlated risks and the too-big-to fail principle: If you are sure to be rescued because your failure could take down the global financial system, then you have an incentive to get dangerously large.
	www.clevelandfed.org /Research/Com2001/0201pr.htm (523 words)

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