Incentive provision and coordination as market functions

IZA Logo
   

IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 09.06.2010, 12:15 - 13:30

   

Presentation by 

John E. Roemer (Yale University)
   

Abstract:

The market has both a coordination function and an incentive function. The first theorem of welfare economics is all about coordination; the principalagent model is all about incentives. What is the relative importance of the market in carrying out these two functions? While there has been a shift in economic theory in the past thirty years from emphasizing the coordination role to emphasizing the incentive role, it is not clear whether this reflects a new and deeper understanding of the market. Understanding the marketís functions, in real economies, may be key for understanding the degree to which redistribution in them is feasible.

   
Download complete paper   
   
For more information, please contact seminar@iza.org