Roy Radner and Incentive Theory *

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...

The Evaluation of Information in Organizations

The Ex Ante Incentive Compatible Core in the Absence of Wealth Effects

Consider an exchange economy in which consumers have private information (represented by their types). Issues of resource allocation in such an economy concern how the allocation is determined by the information state (profile of agents’ types). An allocation rule, in which the (possibly random) allocation depends on the information state of the economy, can then be viewed as a direct mechanism...

Team Decision Problems

Repeated Partnership Games with Imperfect Monitoring and No Discounting

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