The new Soviet incentive model

摘要: Suppose y is a "performance indicator" for an enterprise. As examples, might stand output, profits, cost savings, or factor productivity. With standard piecework reward systems the manager of enterprise will try to convince his superiors that likely be small, thereby entitling him lower target which easier fulfill. A new reform in Soviet economy aimed at stimulating more ambitious plans by making bonus size depend on plan as well degree it has been fulfilled. This novel incentive scheme modelled present paper and its basic properties are analyzed. Some applications extensions proposed.