| ||||||||||||||||||||
 Trade In this Item for up to £9.75
Get an extra £5 when you trade in books worth £10 or more until June 30, 2012. Trade in The Theory of Incentives: The Principal-Agent Model for an Amazon.co.uk gift card of up to £9.75, which you can then spend on millions of items across the site. Trade-in values may vary (terms apply). Find more products eligible for trade-in.
|
Frequently Bought Together
Product details
|
More About the Author
Product Description
Review
Product Description
Economics has much to do with incentives--not least, incentives to work hard, to produce quality products, to study, to invest, and to save. Although Adam Smith amply confirmed this more than two hundred years ago in his analysis of sharecropping contracts, only in recent decades has a theory begun to emerge to place the topic at the heart of economic thinking. In this book, Jean-Jacques Laffont and David Martimort present the most thorough yet accessible introduction to incentives theory to date. Central to this theory is a simple question as pivotal to modern-day management as it is to economics research: What makes people act in a particular way in an economic or business situation? In seeking an answer, the authors provide the methodological tools to design institutions that can ensure good incentives for economic agents.
This book focuses on the principal-agent model, the "simple" situation where a principal, or company, delegates a task to a single agent through a contract--the essence of management and contract theory. How does the owner or manager of a firm align the objectives of its various members to maximize profits? Following a brief historical overview showing how the problem of incentives has come to the fore in the past two centuries, the authors devote the bulk of their work to exploring principal-agent models and various extensions thereof in light of three types of information problems: adverse selection, moral hazard, and non-verifiability. Offering an unprecedented look at a subject vital to industrial organization, labor economics, and behavioral economics, this book is set to become the definitive resource for students, researchers, and others who might find themselves pondering what contracts, and the incentives they embody, are really all about.
Incentive theory emerges with the division of labor and exchange. Read the first page
Concordance
Front Cover | Copyright | Table of Contents | Excerpt | Index
Tag this product(What's this?)Think of a tag as a keyword or label you consider is strongly related to this product.
Tags will help all customers organise and find favourite items. |
What Other Items Do Customers Buy After Viewing This Item?
Customer Reviews
r.
This volume, the first in what is described as a two-volume survey, should be on the bookshelf of any serious economist or any graduate student trying to work her way through a serious first or second year microeconomic theory. It could also be used effectively to teach a first-year graduate or an advanced undergraduate course on asymmetric information and contracts.
What is so nice about the book pedagogically in my view is the way the authors have synthesized so many results by working with variants of simple models. It's the power of elegant simplicity. When looking at moral hazard for example, they start with the simplest two outcome, two action problem, with a risk-neutral principal and agent. Then they slowly and selectively complicate the same base model (e.g. adding a limited liability constraint, making the agent risk averse, allowing for more action levels and outcomes, adding more tasks, more agents, etc). Hence you get the essential insights without being overly burdened from the start with cumbersome notation. They have several nice graphical representations to accompany the very well written intuitive explanations. The end result is that you end up seeing with clarity how many results in the literature, that had previously seemed disparate, tie together very neatly and share a common mathematical structure.
The authors state in the introduction (which is a brilliant historical survey of ideas and the development of the field) that they plan a second volume on multi-agent contracts and mechanism design. It should also be fabulous and will hopefully help to popularize and democratize an area of economics that is packed with essential insights for understanding political economy and the behavior of groups, hiearchies and organizations, yet has mostly been left to mathematical economists.
There are other books out there like Macho-Stadler et al' "An Introduction to the Economics of Information: Incentives and Contracts" and Salanie's "The Economics of Contracts" which are targeted at a similar audience. These are quite good in their own right, but do not have the breadth and insight of this volume.
Nonverifiability, the mixed model of adverse selection and moral hazard and some dynamic aspects of the two are also incorporated in a great deal of details.
This is the text on incentive theory, not just introduction. Its comprehensive insights are useful and time-saving for readers. You need not to read a bulk of papers, after reading the book, you just complement it with some core papers of the topics. (such as multidimensional screening, random participation)
If there is some weakness, it would be that... the authors present some topics too short and some notation used are not well explained, particularly the extension of the core models and some selected topics.
Anyways, i found it helpful and complete for studying incentive theory but it requires deep understanding of optimization theory and some experience of economic-theorethic arguments.
This book is written by a major contributor of the field. It would be hard to write another book to compete with this one in the field. . .
Listmania!
Look for similar items by category
- Books > Business, Finance & Law > Economics > Theory & Philosophy
- Books > Business, Finance & Law > Management > Human Resources > Professional Development
- Books > Business, Finance & Law > Professional Finance
- Books > Science & Nature > Earth Sciences & Geography > Education > Higher Education
- Books > Science & Nature > Earth Sciences & Geography > Geography
Look for similar items by subject
Feedback
- Would you like to update product info or give feedback on images?
- I am the Author, and I want to comment on my book.
- I am the Publisher, and I want to comment on this book.
|
