As the Claridge tried to match these costly incentives, the Trump World's Fair opened, pulling away even more gamblers.

Officials of the General Motors Corporation have said they would reduce production rather than resume the costly incentives that produced an operating loss in the 1986 third quarter.

The shortfall is also expected to postpone the Education Department's controversial desegregation plan, which calls for the development of magnet schools and other costly incentives.

Credits Toward Pensions A more costly incentive would offer teachers in troubled schools extra service credits toward their pensions.

But others say the bureaucracy performs well enough and does not need costly incentives.

To many states, economic development means tax rebates and other costly incentives to lure businesses away from their neighbors - "smokestack chasing," it is called.

In addition, auto makers have backed off from costly incentives, and the deflation of car prices that has occurred over the last two years appears to be ending.

But Mr. Sprinzen said this more expensive mix of vehicles isn't producing greater profitability because automakers are providing costly new incentives.

Analysts said Chrysler, like other carmakers, relied on costly incentives to pump up sales in the fourth quarter of 2002.

It also more closely matched production to sales capacity, avoiding the need for costly incentives except when it had to counter competitor's programs.