Learn IOE

Public Contracting : Incentive Theory

Description

Asymmetric information gives rise to pervasive problems in economic relationships. In this video Stephane Saussier explains how setting the right incentives could be a solution. However, there will be a rent extraction/efficiency trade-off. The theoretical framework has been developed in the 70’s by economists such as Baron & Myerson, Laffont, Tirole and many others.

References

Akerlof, G. (1970). The Market for Lemons: Qualitative Uncertainty and the Market Mechanism. Quarterly Journal of Economics, 84(3), 488–500.

Stéphane Saussier, Professor of Economics, Sorbonne Business School (IAE de Paris)

Stéphane Saussier is Professor of Economics and Management at the Sorbonne Business Schools where he is running the MBA program. He is a specialist of contract and organization theories. Since 2009, he has been running a research group working on the (read more ...)