The Sequential Self-Selection Auction Mechanism for Selective Reenlistment Bonuses: Potential Cost Savings to the U.S. Marine Corps
Abstract
This thesis explores the potential cost savings for the Marine Corps by replacing the current SRB program with one that uses the format of a Sequential Self-Selection Auction Mechanism (S3AM). The power of predicting behavior based upon opportunity costs is the theoretical underpinning of the Sequential Self-Selection Auction Mechanism (S3AM). The S3AM greatly reduces the payment of economic rent. The payment of economic rent is limited because the Marine Corps would only pay Marines a monetary sum that more closely corresponds to their active duty opportunity cost. In other words, the S3AM would allow the Marine Corps to capture more of the economic surplus, making the SRB process substantially more cost effective. If a S3AM were used in lieu of the current SRB program, the Marine Corps would potentially save money while still meeting end strength requirements. For example, using the S3AM in FY 2006 would have potentially saved the Marine Corps $12,123,885, $690,471 and $118,390, respectively, for the three Military Occupational Specialties (MOSs) analyzed, based on a four year multiple. This savings would have been realized, if the two and six year S3AM model were used to pay FY 2006 bonuses to the 0311s, 0621s and 5811s that reenlisted.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 2007
- Accession Number
- ADA469980
Entities
People
- Paul B. Bock
Organizations
- Naval Postgraduate School