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The term compensation is widely used in every-day language, in psychological research, and also discussed in the context of Attention Deficit Hyperactivity Disorder (ADHD). However, few studies have looked at psychological compensation in ADHD systematically and theory based. Compensation can be inferred if a deficit (i.e., a mismatch between skill and environmental demand) is counterbalanced by the investment of more effort, the utilization of latent or the acquisition of new skills. Based on the application of a theoretical framework (Bäckman & Dixon, 1992) to ADHD, I developed the following aims: (1) To reassess the awareness of deficits in ADHD and (2) to explore psychological compensation in a group with ADHD that accomplishes high achievement.
The results of Study 1 showed that children with ADHD did not overestimate their own skills compared to a group matched for academic achievement. In Study 2, college students with ADHD reported higher achievement motivation compared to college students without ADHD. Furthermore, results indicated that women with ADHD compensate by adopting compensatory effort and obsessive-compulsive behavior. Study 3 showed that female college students compensate for possible deficits in solving a flanker task by being overly cautious, which may reflect more obsessive-compulsive behavior.
The studies are discussed within the framework of psychological compensation. They add to the understanding of compensation in ADHD by (1) the reassessment of awareness of deficits in ADHD by including a group without ADHD but with low achievement, and by (2) suggesting that overly cautious behavior could be a form of psychological compensation in females with ADHD enabling them to enter college, leading to a late diagnosis and to good performance in cognitive tasks (i.e., flanker task).
Limitations are, that I did not test all components of the theoretical framework in one study and that I did not include adults with ADHD that did not enter college in Study 2 and 3 to test if achievement motivation or overly cautious behavior explains why some adults with ADHD gain admittance to higher education and show good performance in cognitive tasks and others do not.
The paper analyzes the mutual influence of the capital structure and the investment decision of a bank, as well as the incentive effects of the bank executives compensation schemes on these decisions. In case the government implicitly or explicitly insures deposits and/or the banks debt, banks are incentivized to invest in risky assets and to have a high leverage. Capital regulation could potentially solve this excessive risk taking problem. However, this is only possible if the regulator can observe and properly measure the investment risks of the bank, which was called into question during the 2008-09 financial crisis. Hence, we propose a regulatory approach that is also able to implement the first best risk taking levels by the bank, but does not require the regulator to know the investment risk of the bank. The regulatory approach involves the implementation of capital requirements, which are made contingent on the management compensation.
Basel III and CEO compensation in banks: pay structures as a regulatory signal : [March 6, 2013]
(2013)
This paper proposes a new regulatory approach that implements capital requirements contingent on managerial compensation. We argue that excessive risk taking in the financial sector originates from the shareholder moral hazard created by government guarantees rather than from corporate governance failures within banks. The idea of the proposed regulation is to utilize the compensation scheme to drive a wedge between the interests of top management and shareholders to counteract shareholder risk-shifting incentives. The decisive advantage of this approach compared to existing regulation is that the regulator does not need to be able to properly measure the bank investment risk, which has been shown to be a difficult task during the 2008-2009 financial crisis.
The debate on effects of globalization on welfare states is extensive. Often couched in terms of a battle between the compensation and the efficiency thesis, the scholarly literature has provided contradictory arguments and findings. This article contributes to the scholarly debate by exploring in greater detail the micro-level foundations of compensation theory. More specifically, we distinguish between individual policy preferences for compensatory social policies (unemployment insurance) and human capital-focused social investment policies (education) and expect globalization to mainly affect demand for educational investment. A multi-level analysis of ISSP survey data provides empirical support for this hypothesis. This finding provides an important revision and extension of the classical analytical perspective of compensation theory, because it shows that citizens value the social investment function of the welfare state above and beyond simple compensation via social transfers. This might be particularly relevant in today's skill-centered knowledge economies.
Stability maintenance at the grassroots: China’s weiwen apparatus as a form of conflict resolution
(2013)
This working paper explores the history and potential of “stability maintenance” (weiwen) as a form of conflict resolution in China. Its emphasis on conflict resolution is novel. Previous examinations of the weiwen apparatus have concentrated on its political function, namely to manage resistance within society and maintain the authority of the party-state. This avenue of investigation has proved fruitful as a means of characterising the political motivation and the higher-level strategies involved in stability maintenance. Nonetheless, there remain significant conceptual and empirical gaps relating to how stability maintenance offices and processes actually function, particularly out of larger cities and at local levels. The research described in this paper aims to consider the effectiveness of stability maintenance as a part of the “market” for conflict resolution in local China, and to test the hypothesis that conflict resolution as facilitated by weiwen is the most pragmatic and effective means of actually resolving conflicts in the current Chinese political context, notwithstanding the closeness of the stability maintenance discourse to state authority and its relative distance from rule of law-based methods of dispute resolution...
In an experimental setting in which investors can entrust their money to traders, we investigate how compensation schemes affect liquidity provision and asset prices. Investors face a trade-off between risk and return. At the benefit of a potentially higher return, they can entrust their money to a trader. However this investment is risky, as the trader might not be trustworthy. Alternatively, they can opt for a safe but low return. We study how subjects solve this trade-off when traders are either liable for losses or not, and when their bonuses are either capped or not. Limited liability introduces a conflict of interest because it makes traders value the asset more than investors. To limit losses, investors should thus restrict liquidity provision to force traders to trade at a lower price. By contrast, bonus caps make traders value the asset less than investors. This should encourage liquidity provision and decrease prices. In contrast to these predictions, we find that under limited liability investors contribute to asset price bubbles by increasing liquidity provision and that caps fail to tame bubbles. Overall, giving investors skin in the game fosters financial stability.