Information, Incentives and the Economics of Control

Description

This 1992 book examines alternative methods for achieving optimality without all the apparatus of economic planning (such as information retrieval, computation of solutions, and separate implementation systems), or a vain reliance on sufficiently 'perfect' competition. All rely entirely on the self-interest of economic agents and voluntary contract. The author considers methods involving feedback iterative controls which require the prior selection of a 'criterion function', but no prior calculation of optimal quantities. The target is adjusted as the results for each step become data for the criterion function. Implementation is built in by the incentive structure, and all controls rely on consistency with the self-interest of individuals. The applicability of all the methods is shown to be independent of the form of ownership of enterprises: examples are given for industries which are wholly privately owned, wholly nationalized, mixed and labour-managed.

"Archibald's book is timely: its contents throw light on several important current debates which are being argued within frameworks less appropriate than the one he sets out...this is a short, insightful, and timely book in a distinguished interventionist intellectual tradition in the area of public policy and public institutions." Geoffrey Heal, Journal of Economic Literature