Book contents
- Frontmatter
- Chapter 1 Behavior under risk: recent developments in theory and applications
- Chapter 2 Financial contracting theory
- Chapter 3 Collusion and the theory of organizations
- Chapter 4 The nature of incomplete security markets
- Chapter 5 Incomplete financial markets and indeterminacy of competitive equilibrium
- Chapter 6 Endogenous fluctuations
- Chapter 7 Equilibrium in competitive, infinite dimensional settings
- Chapter 8 Infinite-dimensional equilibrium theory: discussion of Jones
Chapter 3 - Collusion and the theory of organizations
Published online by Cambridge University Press: 05 January 2013
- Frontmatter
- Chapter 1 Behavior under risk: recent developments in theory and applications
- Chapter 2 Financial contracting theory
- Chapter 3 Collusion and the theory of organizations
- Chapter 4 The nature of incomplete security markets
- Chapter 5 Incomplete financial markets and indeterminacy of competitive equilibrium
- Chapter 6 Endogenous fluctuations
- Chapter 7 Equilibrium in competitive, infinite dimensional settings
- Chapter 8 Infinite-dimensional equilibrium theory: discussion of Jones
Summary
INTRODUCTION
Collusion and the social sciences
The phenomenon of collusion, and the concomitant concepts of “group,” “power,” “bureaucracy,” and “politics” figure prominently in political science and sociology. Political scientists have always been concerned by the possibility that politicians and bureaucrats might identify with interest groups rather than serve the public interest. Montesquieu's plea for building a system of checks and balances among branches of government to limit the perversion of public policy, and the writings of the American federalists, in particular Madison, have deeply influenced the design of many constitutions. Later, Marx suggested that the State uses its coercive power to benefit large trusts. This vision of the capture of political life by interest groups was considerably enriched in the twentieth century by political scientists (Bentley, Truman) and especially by the political economists of the Chicago school (Stigler, Peltzman, Becker) and the Virginia school (Buchanan, Tollison, Tullock).
Concurrently, sociologists (Crozier, Dalton) and organization theorists (Cyert and March) have emphasized that behavior is often best predicted by the analysis of group as well as individual incentives. It would be naive to build incentives for individual members of an organization without considering their effect on collective behavior. In other words, incentive structures must account for the possibility that members collude to manipulate their functioning.
- Type
- Chapter
- Information
- Advances in Economic TheorySixth World Congress, pp. 151 - 213Publisher: Cambridge University PressPrint publication year: 1993
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