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A Problem with Charging Other Departments for Allocated Support Costs

question 109

Multiple Choice

A problem with charging other departments for allocated support costs is:
I. The charge is often perceived to be very high
II. Support services are likely to be underused
III. Other departments may choose to replicate or outsource internal services


Definitions:

Dictator Game

An experimental economics scenario where one player, the "dictator," determines how to split an endowment between themselves and another player.

Ultimatum Game

A game in economic experiments where two players decide how to divide a sum of money; one proposes the split, and the other can accept or reject it.

Behavioral Economists

Scientists focusing on the role of psychological, cognitive, emotional, cultural, and social elements in shaping the economic decisions of individuals and institutions.

Narrowly Self-Interested

Describes behavior focused on individual gain often at the expense of others' well-being or societal welfare.

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