Information, Incentives, and Economics Mechanisms

Information, Incentives, and Economics Mechanisms was first published in 1987.In 1960, economist Leonid Hurwicz formulated a theoretical model that initiated a field of research on the design and analysis of economic mechanisms (the institutional rules and structures by which economic activity is coordinated). By treating mechanisms as a "variable," this research provided a methodology for their comparison. The inefficiency of mechanisms arises from 1) the dispersion of information among agents, and 2) agents' incentives to seek private advantage from this dispersion. Exploration of these limits to efficiency was pioneered by Hurwicz in 1972, and has become a major area of active research. In part, this research enables economic theory to be a more effective instrument for the study of how a society can and should organize its economic activity.The fourteen new papers in this volume -- by a group of distinguished economists, all former students, colleagues, and collaborators of Hurwicz -- address major themes in the study of information and incentives for implementing desired economic allocations. Two comprehensive survey essays provide introductions to the topics of incentive in decentralized organizations generally and, more specifically, in classical models of private goods and public goods economies. The following sections deal with informational aspects of mechanism theory, information and the stability of general resource allocation mechanisms, market mechanisms, and nonmarket and general mechanisms.In addition to the editors, the contributors are: Masahiko Aoki, Kenneth J. Arrow, Xavier Calsamiglia, Jerry R. Green, James S. Jordan, Jean-Jacques Laffont, John Ledyard, Thomas Marschak, Eric Maskin, Andreu Mas-Coleli, Kenneth R. Mount, Andrew Postlewaite, Jean-Charles Rochet, John Roberts, David Schmeidler, and William Thomson.