Roy Radner and incentive theory
نویسنده
چکیده
How to provide agents with sufficient motivation to do what society – or its proxy in the guise of a center or social planner – wants them to do is the subject of incentive theory. The theory has normative force whenever, metaphorically speaking, the invisible hand of the market fails to provide such motivation automatically. Market failure can come about either because markets are imperfect in some way or because they do not exist at all. Indeed, a leading example of a non-market environment is the internal organization of a large corporation. Alfred Chandler (1977) made just this point when he gave his study of the modern American enterprise the title The Visible Hand. The study of these large enterprises – which itself is an enterprise that is currently blossoming – has drawn on incentive theory in a fundamental way. And it is not surprising that Roy Radner – who had a long-standing fascination and more than casual personal acquaintance with large organizations – should have been inspired to make important contributions to this theory. In this essay, I shall provide an outline of some of the major results in incentive theory with particular attention to Radner’s work on the subject.
منابع مشابه
Roy Radner and Incentive Theory *
How to provide agents with sufficient motivation to do what society — or its proxy in the guise of a center or social planner — wants them to do is the subject of incentive theory. The theory has normative force whenever, metaphorically speaking, the invisible hand of the market fails to provide such motivation automatically. Market failure can come about either because markets are imperfect in...
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