The Economics of Tipping: Tips, Profits and the Market's Demand—Supply Equilibrium

Research indicates that the size of a tip is rarely correlated with the quality of the service rendered. These findings empirically refute the widely accepted economic argument that tipping is an efficient quality-control mechanism. This study provides an alternative explanation to the existence of tipping. It develops a microeconomics tipping model and demonstrates that tips affect the firm's profitability through changes in the market's demand–supply equilibrium when consumer segments differ in their demand functions and their propensity to tip. This demand–supply framework can serve as a useful tool for managers who wish to select an appropriate tipping policy for their firms.

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Audit Reviewers’ Evaluation of Subordinates’ Work Quality

Auditing A Journal of Practice & Theory ◽

10.2308/aud.2010.29.1.251 ◽

2010 ◽

Vol 29 (1) ◽

pp. 251-266 ◽

Cited By ~ 18

Author(s):

Hun-Tong Tan ◽

Premila Gowri Shankar

Keyword(s):

Quality Control ◽

Review Process ◽

Control Mechanism ◽

Performance Ratings ◽

Work Quality ◽

Audit Review ◽

Quality Control Mechanism

SUMMARY: Reviewers routinely assess the quality of preparers’ work as part of the quality control mechanism in the audit review process. We investigate whether reviewers’ assessment of preparers’ work quality is jointly influenced by their initial opinions on the audit task, the strength of the justification underlying the preparers’ conclusions, and the importance reviewers ascribe to whether subordinates’ work is aligned with the superiors’ preferences. We find that audit reviewers accord better (poorer) performance ratings to preparers’ justification memos with conclusions that are congruent (incongruent) with their initial opinions, with the opinion congruence effects being greater for memos with stronger justifications. These results are moderated by the extent to which reviewers believe that it is important for subordinates to align their work with the superior’s preferences. Opinion congruence effects for low alignment-importance reviewers are moderated by justification strength, but not for high alignment-importance reviewers.

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Constant frame quality control for H.264/AVC

APSIPA Transactions on Signal and Information Processing ◽

10.1017/atsip.2013.4 ◽

2013 ◽

Vol 2 ◽

Author(s):

Ching-Yu Wu ◽

Po-Chyi Su ◽

Long-Wang Huang ◽

Chia-Yang Chiou

Keyword(s):

Quality Control ◽

Control Mechanism ◽

Signal To Noise Ratio ◽

Structural Similarity ◽

Video Frame ◽

Quality Video ◽

Q Model ◽

Constant Quality ◽

Quality Control Mechanism

A frame quality control mechanism for H.264/AVC is proposed in this research. The research objective is to ensure that a suitable quantization parameter (QP) can be assigned to each frame so that the target quality of each frame will be achieved. One of the potential application is consistently maintaining frame quality during the encoding process to facilitate video archiving and/or video surveillance. A single-parameter distortion to quantization (D–Q) model is derived by training a large number of frame blocks. The model parameter can be determined from the frame content before the exact encoding process. Given the target quality for a video frame, we can then select an appropriate QP according to the proposed D–Q model. Model refinement and QP adjustment of subsequent frames can be applied by examining the coding results of previous data. Such quality measurements as peak signal to noise ratio (PSNR) and structural similarity (SSIM) can be employed. The experimental results verify the feasibility of the proposed constant quality video coding framework.

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An Updated Analysis of Enforcement Actions against Engagement Quality Reviewers

Current Issues in Auditing ◽

10.2308/ciia-51142 ◽

2015 ◽

Vol 9 (2) ◽

pp. A1-A12 ◽

Cited By ~ 3

Author(s):

Michael Kraussman ◽

William F. Messier

Keyword(s):

Quality Control ◽

Small Firms ◽

Control Mechanism ◽

Data Availability ◽

Public Accounting ◽

Accounting Firms ◽

Quality Review ◽

Big 4 ◽

Quality Control Mechanism

SUMMARY Engagement quality review (EQR) is designed to be a quality control mechanism for improving the quality of audit engagements. This paper updates the findings of Messier, Kozloski, and Kochetova-Kozloski (2010) on enforcement actions against engagement quality (EQ) reviewers, especially in light of the December 2009 implementation of the new standard on engagement quality review, Auditing Standard No. 7 (AS7). We identified 16 enforcement actions since 2009 that involve some type of sanction against an EQ reviewer. Only two cases involved a Big 4 firm. Thus, the vast majority of cases involved EQRs from smaller public accounting firms. Six cases occurred prior to the implementation of AS7, nine cases occurred after AS7 took effect, and one case involved violations both prior to and after AS7 implementation. All of the pre-AS7 cases involved sanctions resulting from an inadequate EQR. In contrast, all of the post-AS7 cases involved sanctions resulting from a failure to perform an EQR. Our review of these post-AS7 cases suggests that some small firms were either unable or unwilling to bring in qualified outside reviewers. Our findings provide important implications for practitioners, regulators, and researchers interested in engagement quality review and in improving the overall quality of audit engagements. Data Availability: The cases included in this study are available from public sources.

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Mechanism Design for Quality Control in ATO Supply Chain with Mixed Inspection

Advanced Materials Research ◽

10.4028/www.scientific.net/amr.204-210.427 ◽

2011 ◽

Vol 204-210 ◽

pp. 427-432

Author(s):

Bo Huang ◽

Yu Yu Li ◽

Bin Dan

Keyword(s):

Quality Control ◽

Supply Chain ◽

Control Mechanism ◽

Control Model ◽

Quality Level ◽

The Core ◽

Multiple Component ◽

Quality Control Mechanism ◽

Optimal Quality

This paper studies how to design a mechanism to control the quality of final product and components. Considering that ATO supply chain is composed of multiple component suppliers and a manufacturer, which is the core company and uses incoming inspection and quality tracing to control the quality of components, we presented a quality control model of ATO supply chain and obtain the optimal quality control mechanism consisting of component purchase prices, penalties on defect. We find that the manufacturer will choose the optimal quality level of ATO supply chain; the manufacturer can stimulate suppliers to choose the optimal quality levels of ATO supply chain through designing a reasonable purchase prices and penalties when their reservation payoffs are small, otherwise, it will design a profit transfer mechanism to modify the quality control mechanism, as a result, suppliers will choose the optimal quality levels and the manufacturer’s profit will be maximized.

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