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London Traded Options Market (F1)<br />A market associated with the INTERNATIONAL STOCK EXCHANGE, founded in 1978. In 1991, it merged with the LONDON INTERNATIONAL FINANCIAL FUTURES EXCHANGE.
incentive pay scheme (J3)<br />A wage or salary system that relates all or part of employment earnings to the output of a worker. Manual (blue-collar) workers have often had the opportunity to participate in PRODUCTIVITY schemes, including being paid by the number of 'pieces' produced rather than by the amount of time supplied. Many sales staff have a high proportion of their pay in the form of commission. Managerial staff in many organizations are offered a profit-sharing scheme. Workers are most likely to increase their productivity when a new scheme is introduced - hence the suggestion that incentive schemes should be periodically replaced.
economics and psychology (D1) Psychological theory has been used in economics to improve the modelling of the motivation of economic agents, to understand how human beings behave when faced with UNCERTAINlY and to learn about the formulation of preferences. Psychology has contributed to many areas of economics, including the examination of entrepreneurship, unemployment, poverty, taxation and marketing.<br /><em>See also:</em> bounded rationality; cognitive consonance; cognitive dissonance<br /><em>Reference</em><br />Earl, P.E. (1988) Psychological Economics: Development, Tensions, Prospects, Boston: Kluwer.<br /> - - (1990) 'Economics and psychology: a survey', Economic Journal100: 718-55. MacFadyen, A.J. and MacFadyen, H.W. (eds) (1986) Economic Psychology: Intersections in Theory and Application, Amsterdam: North-Holland.
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non-profit enterprise (L3)<br />An organization, other than a firm, whose members have no private PROPERlY RIGHTS associated with it and, hence, no entitlement to profits. These enterprises, usually financed by donations, endowments or government grants, aim to maximize the quantity and quality of the service provided and to break even. In the public sector, most governmental institutions are NPEs; in the private sector, households, charitable foundations, mutual insurance companies and a variety of clubs are the major examples. The motives for establishing NPEs are various, including the provision of MERIT GooDs, the subsidization of religion and the arts and the commemoration of a major benefactor. A dislike of market mechanisms and altruistic attitudes have been fundamental to the growth of NPEs <br /><em>Reference</em><br />Gassier, R_S. (1986) The Economics of Non-profit Enterprise: A Study in Applied Economic Theory, New York and London: University Press of America Holtman, A.G. (1988) 'Theories of nonprofit institutions', Journal of Economic Surveys 2: 30-45 Rose-Ackerman, S. (ed.) (1986) The NonProfit Sector: Economic Theory and Public Policy, Oxford: Oxford University Press.
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