Fringe Benefits: President Decision Making

A president at a university wants to reduce expenditures on fringe benefits (while maintaining the quality of faculty and staff). The president appointed a task force, which consists of faculty and staff from departments throughout the university. The task force has been asked to design a new fringe benefit package.

Does the president want to commit to accepting the committee (task force) report or would the president want to reserve the right to make modifications? Explain.

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...ration for their job. The task force has no incentive to reduce fringe costs. If you think about it as a question of utility, every member of the task force is seeking to minimize the effect on their individual utility from ...