Comments on: Mechanism Design and the Theory of the Firm http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/ Economics of organizations, strategy, entrepreneurship, innovation, and more Sun, 12 Feb 2012 08:11:55 +0000 hourly 1 http://wordpress.com/ By: Ed Clarke http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-56402 Sun, 28 Oct 2007 18:15:51 +0000 http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-56402 See letter on:
Originality in Mechanism Design
Clarke weblog

]]> By: Mind Your Decisions Blog » Blog Archive » Game Theory Tuesdays: Use Mechanism Design to Improve Your Finances http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-55918 Tue, 23 Oct 2007 05:36:32 +0000 http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-55918 [...] This problem is example of mechanism design theory, which is the study of creating rules and incentives to allocate resources in what the designer sees as an efficient or fair way. The field has gotten attention recently because of the recent American Nobel Prize winners. Mechanism design is the theoretical basis for why markets in general work, but it also comes up in many situations, like how airlines creatively price tickets. [...]

]]> By: srp http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-55534 Fri, 19 Oct 2007 03:20:01 +0000 http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-55534 I think the prize is well-deserved, because the logic of mechanism design is so fundamental to problems in taxation, contracting, regulation, etc. This kind of fundamental theoretical work is the capital investment of economics–it doesn’t have direct end uses most of the time (with exceptions such as auctions), but it assists in the roundabout production of theories and applications. It’s pretty hard, for example, to solve a lot of principal-agent models without recourse to the revelation priinciple, so proving when it’s valid is important.

I certainly think Alchian would be very deserving for his pioneering idas in search theories of unemployment, or his analysis of costs, or his paper on evolutionary arguments for competitive efficiency. His only realistic chances, in my opinion, would be a package deal with Demsetz and Williamson for theory of the firm or a hookup with Nelson and Winter for evolutionary economics.

]]> By: dhoopes http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-55496 Thu, 18 Oct 2007 19:33:04 +0000 http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-55496 I’m a little disappointed in the lack of response to the Noble prize announcement. Other econ-type sites have many more comments. Does this mean that Peter is the only one around here that understands the award winning work enough to comment on it? Is it as detached as critics say? Or, is it more useful as others say? Shouldn’t the award have gone to Williamson? Let’s face it, Ollie is very influential. Coase would not have won had it not been for Williamson. Oliver Hart. My personal favorite (again) is Harold Demsetz. Has Alchian won? I had thought he had if not, that’s probably overdue (he is heavily cited in a few major literatures).

]]> By: dhoopes http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-55238 Tue, 16 Oct 2007 02:07:33 +0000 http://organizationsandmarkets.com/2007/10/15/mechanism-design-and-the-theory-of-the-firm/#comment-55238 Seems like a pretty odd choice for a Nobel prize. As much as I stick up for economics, I wonder that there aren’t some economists whose work has been more useful. How about Demsetz? However, some of the other prizes this year are…questionable.

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