Information and Quality When Motivation is Intrinsic: Evidence from Surgeon Report Cards

If profit maximization is the objective of a firm, new information about quality should affect firm behavior only through its effects on market demand. I consider an alternate model in which suppliers are motivated by a desire to perform well in addition to profit. The introduction of quality “report cards” for cardiac surgery in Pennsylvania provides an empirical setting to isolate the relative role of extrinsic and intrinsic incentives in determining surgeon response. Information on performance that was new to surgeons and unrelated to patient demand led to an intrinsic response four times larger than surgeon response to profit incentives. (JEL D83, I11, L15)

Educating for Responsible Management

This article reviews theories of management education and current coverage of corporate social responsibility (CSR) concepts in the United States, Europe, and elsewhere. It then examines prospects for responsible management education in the 21st century. It proceeds in four main sections. First, it addresses management education theories. Second, it assesses the state of knowledge concerning responsible management. Third, it examines the state of knowledge concerning education for responsible management. Views range from the impossibility of changing the moral character of adults and the uselessness of responsibility education through the identification of profit incentives for responsibility activities to demands for business schools and corporations to try harder in the wake of recent corporate scandals. Fourth, this article discusses the effect of the Association to Advance Collegiate Schools of Business international accreditation standards on responsibility education. A concluding section summarizes the chief points.

SOME MARKET EFFECTS OF E-COMMERCE

An important characteristic of E-commerce is that it is a form of technological change. The effects of E-commerce induced reductions in business production costs and on seller to buyer transaction costs are assessed. Comparative static models for different market structures are used to assess the effects of E-commerce on prices, quantities, aggregate efficiency gains, and the distribution of benefits and costs. Ultimately consumers are the principal beneficiaries via lower prices. Competitive forces and profit incentives induce firms to adopt cost reducing E-commerce technology.