Suchergebnisse

Faculty support services make up a very significant share of university operating budgets. Incremental-like budgeting continues to be a central component of the budgeting process for these services, even for some universities that use responsibility centre budgeting (RCB). Incremental budgeting has well-known incentive problems, such as March Madness spending. Although RCB has been successful in the generation of revenue, it has been less successful in managing faculty support services costs. The focus here is to develop a new approach using established economic theory. Under the proposed mechanisms, a rational and self-interested dean cannot do better than accurately report the benefits of a university-provided service so that the efficient amounts are provided. The right mechanism depends on the nature of the faculty support service

AbstractWe model imperfect governments with public choices that are sequential, myopic and not free of error. We first use this framework to explore governmental incremental budgeting. We argue that a model of bounded rationality is required to capture the empirical reality of incremental budgeting. We then provide a model that integrates bounds errors and systematic errors. We argue that the empirical evidence is that bounds errors and systematic errors are inextricably intertwined—some level of bounded rationality is required for systematic errors to emerge. We use this to explore political information lobbying. A testable hypothesis is that lobbyists will focus efforts on policy‐makers of low ability. We show that choosing leaders with high ability, that is Madison's wisdom to discern, is important, especially when policy decisions concern dangerous products (rifles) or dangerous environments (pandemics).