A resource-allocation mechanism is viewed as a gigantic information processing system. Such a system utilizes the knowledge dispersed among economic agents concerning their preferences, technologies, and endowments to determine how resources flow. The chapter discusses that information is...

This chapter discusses an assortment of recent economic studies in the same way: as steps toward characterizing those organization designs that do well, according to some measure of gross performance, with the informational and administrative resources they require. The steps turn out to be...

This chapter surveys issues in positive second-best theory, specifically the theory of the optimal pricing of goods produced by public firmsthat is, firms whose objective is the maximization of social welfare. It is assumed that these firms, characteristically, display increasing returns to...

This chapter discusses that the central element in the theory of optimal taxation is information. Optimal tax theory began with Ramsey, who solved the problem of raising revenue by commodity taxes from a single consume. It has been assumed that lump-sum taxation, as it happens quite...

This chapter discusses the social choice theory. There is social choice problems, which deals with methods of marshalling information, particularly those relating to the people involved, to arrive at correct social judgments or acceptable group decisions. But the natures of the possible...

This chapter discusses that the problem of economic planning is best viewed as one of solving an extremely large constrained maximization problem. The objective function is identified with a measure of economic welfare, which has maximized subject to a variety of constraints, including those...

This chapter is concerned with the long-term tendencies of paths of capital accumulation that maximize, in some sense, a utility sum for society over an unbounded time span. However, the structure of the problem is characteristic of all economizing over time whether on the social scale or the...

A very widespread economic situation is that of the relation between a principal and an agent. Even in ordinary and in legal discourse, the principalagent relation is significant in scope and economic magnitude. The chapter discusses that the common element is the presence of two individuals....