Get A theory of incentives in procurement and regulation PDF

By Jean-Jacques Laffont

ISBN-10: 0262121743

ISBN-13: 9780262121743

ISBN-10: 0585167974

ISBN-13: 9780585167978

Extra then only a textbook, A thought of Incentives in Procurement and Regulation will consultant economists' examine on rules for future years. It makes a tough and massive literature of the recent regulatory economics obtainable to the typical graduate scholar, whereas delivering insights into the theoretical principles and stratagems now not to be had in other places. in response to their pathbreaking paintings within the software of principal-agent conception to questions of law, Laffont and Tirole strengthen an artificial process, with a selected, even though now not particular, specialize in the rules of ordinary monopolies similar to army contractors, software businesses, and transportation experts. The book's transparent and logical association starts off with an creation that summarizes regulatory practices, recounts the background of proposal that ended in the emergence of the recent regulatory economics, units up the elemental constitution of the version, and previews the industrial questions tackled within the subsequent seventeen chapters. The constitution of the version constructed within the introductory bankruptcy is still an analogous all through next chapters, making sure either balance and consistency. The concluding bankruptcy discusses vital components for destiny paintings in regulatory economics. each one bankruptcy opens with a dialogue of the industrial concerns, an off-the-cuff description of the appropriate version, and an summary of the implications and instinct. It then develops the formal research, together with adequate reasons for people with little education in details economics or online game thought. Bibliographic notes offer a historic viewpoint of advancements within the quarter and an outline of complementary study. specified proofs are given of all significant conclusions, making the booklet worthwhile as a resource of recent examine suggestions. there's a huge set of assessment difficulties on the finish of the booklet. Jean-Jacques Laffont is Professor of Economics at Université des Sciences Sociales in Toulouse the place Jean Tirole is clinical Director on the Institut d'Economié Industrielle.

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Politicians should actually be given incentives to seek social welfare as they themselves have their own goals and am not perfect agents for the voters. 30 31 Â < previous page page_6 next page > If you like this book, buy it! < previous page page_7 next page > Page 7 nonlinear features such as a ceiling on transfers from the government or a guarantee that the firm will not lose money. (Those contracts are then often piecewise linear. ) Cost data play a similar role in some regulated industries' profit-sharing schemes such as the sliding scale mechanisms (in which prices are adjusted to move the firm's rate of return partly toward a target rate of return) or the related partial overall cost adjustment mechanisms (in which prices move up and down less than proportionally with changes in costs).

As gas turbines in electricity) as buffers or by rationing consumers (as is the case here in our fixed capacity formulation). Boiteux (1951) extended the model described above to allow for a normally distributed demand in each period (see Drèze 1964, pp. 18-24, for a full discussion). , see Wilson 1989 and Spulber 1990) has considered more sophisticated rationing schemes. For instance, Wilson (1989) studied the practice of priority servicing in which electric utilities screen the customers for their willingness to pay not only for consumption but also for a low probability of this consumption being interrupted.

Such schemes are orthogonal to the efficiency concern of charging prices that reflect marginal costs; furthermore they introduce perverse incentives in the pattern of cost reduction. Subcosts are sometimes used in formal incentive schemes when the accounting manipulations and input allocations are thought not to affect their measures too much. These subcosts can be "external," such as those of raw material, subcontracting, or the workers' hourly wage. Or they can be "internal" in the sense that they represent the performance of a cost center (design, manufacturing, distribution).

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A theory of incentives in procurement and regulation by Jean-Jacques Laffont

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