组织经济学与管理学ch03-Welfare-theorem课件

Chapter3

WelfaretheoremGeorgeHendrikseEconomicsandManagementofOrganisations:Co-ordination,MotivationandStrategy

FigureIII.1:PositioningofpartII

Figure2.1:SchemeofthoughtPlayersChoicesPayoffsDescriptiveanalysisPrescriptiveanalysisDegreeofrationalityBehavioralhypothesesEquilibriumTestablehypothesesAdviceBehaviouralassumptionsRulesInformationstructureProblemThegeneralequilibriummodelisbasedontwoconceptsIndividualbehaviour.(Behaviouristheoutcomeofmaximisationsubjecttoconstraints.)Market.(Exchangeconditionsadjustuntildecisionsbyindividualsaremutuallyconsistent,i.e.demandequalssupply.)TworesultsaboutsituationsinwhichmarketsworkperfectlyFundamentalwelfaretheoremCoasetheoremBenchmarksTheimportanceoftheseresultsresidesintheprecisespecificationofcircumstances/assumptionswhenmarketsworkefficient/perfectly.ThevariousassumptionswillberelaxedinPartsIII-VIIinordertoinvestigatehowrealbusinessproblemscanbepositionedandaddressed.WelfaretheoremIfeachfirmmaximisesitsprofits,knowingthepricesanditsownproductiontechnology;eachconsumermaximisesutility,knowingthepricesandhisownpreferences;incomeandpricesaresuchthatdemandequalssupplyforeverygoodandservice,then

theresultingallocationofgoodsandservicesisPareto-efficient.Thewelfaretheoremspecifiestheassumptionsofanidealworldwhereallcoordinationandmotivationproblemsaresolved.RemarkablefeaturesOnlylocalinformationandsystem-widepricesareneededtoestablishcoordinationofdecisions.Pursuitofself-interestgivesconsumersandproducersthebestincentives(motivation)totakegooddecisions.ConclusionThemarketsystemresolvescoordinationandmotivationproblemsperfectly,undercertaincircumstances.Pricesservetoinformthepartiesaboutwhattheyshoulddoinordertotakegooddecisionsintheneo-classicalmodel.AssumptionsLarge

numberofconsumersandproducersLawofonepriceAnonimityProduction

functionCommunication

structureContracts(completecontingent)Complete

rationalityAssumptions(cont’d)Price

formation(Walrasianauctioneer)DecentralisationCoordinationCompletesetofmarketsExternalitiesSelf-intrestandPareto-optimalityAllgoodsandservicescanbeexchanges/alienatedIrrelevance1.LargenumberofconsumersandproducersThisassumptionisrequiredinordertoestablishacompetitiveequilibrium.RealityMonopoly

MarketsizeProductiontechnologyLawHowlargeislarge?Doubleoralauction:32.Lawofonepricei.e.thereisonepriceforeachcommodity.RealityThispredictionofthemodeldoesnotalwaysholdinreality,i.e.variouspricesforoneproduct,e.g.healthinsurance.Hiddencharacteristicsproblems.3.AnonymityThisassumptionentailsthatitdoesnotmatterwhoyourtradingpartneris.RealityReputationmattersFigureIII.2:ViewofthefirminthetheoryofgeneralequilibriumPartII:Productionfunction4.ProductionfunctionFigure3.2:ThefirmasaproductionfunctionfL,CYL:labour

C:capital

f:productiontechnology,e.g.CobbDouglas,CES,Translog.

Y:outputRealityLabourentailsproblemsregarding:incentives(PartIIIandIV);cognition(PartVI);coordination(PartVII).Thiswillhaveconsequencesforthedefinition/viewofthefirm.5.CommunicationstructureinthefundamentalwelfaretheoremTheWalrasianauctioneerisatthecentreTheWalrasianauctioneercollectsallinformation(reservationprices)regardingallproductsfromeverybodyintheeconomy.Thisinformationisusedtodeterminetheequilibriumpriceineachmarket.Theseequilibriumpricesaretransmittedtoeverybody.CounterexampleThecommunicationstructureinfirmsoftenconsistsofmanylayers.6.CompletecontingentcontractsThisassumptionentailsthattherearenoinformationproblems.Pricesreflectandsummariseallinformationwell.However,pricesareverysensitivetosmalldistortionsinoralackofinformation(PartVI).Completecontracts(PartIII).Incompletecontracts.7.CompleterationalityBoundedrationalpeoplecan’ttakeallcontingenciesintoaccountwhentakingadecision.Incompletecontracts.Organisationsarechosentocopewithboundedrationalityandavailableinformation.8.PriceformationWalrasianauctioneerdeterminesprices.

Realitybargainingbetweenpartiesproblems

whensmallnumbers&

asymmetric

information.9.DecentralisationHayek:WalrasianauctioneerintheArrow-DebreuWorldimpliescompletecentralisation.Decentralisationmeansthatdecisionsaredelegatedtopersonswiththebestlocalinformation,becauseinformationisdispersed.However,abargainingfoundationofthefundamentalwelfaretheoremcanbeformulated.10.CoordinationWalrasianauctioneerresolvesallcoordinationproblems.

RealityPeople

search

MissedopportunitiesFirms:coordinationbetweenvarious

departments,e.g.marketingversusengineering

11.CompletesetofmarketsThereisamarketforeachproductinthefundamentalwelfaretheorem.Productshavetobeinterpretedbroadly.Theyaredistinguishedregarding:Time

christmas

treein

DecemberversusFebruary;futures

markets.Location

houseinRotterdamversushouseinGroningen.UncertaintyReality:missingmarketsAsymmetric

information(Part

III)Externalities(Chapter

4)SDPqIncreasingreturnstoscaleNointersectionofdemandandsupply.

Pricesalonecan’t/don’tgiveagoodsignal.(Concaveproductionpossibilitiessetinthewelfaretheorem.)12.ExternalitiesResultofanactivitythatcausesbenefits(costs)tootherswithnocorrespondingcompensationprovidedto(orpaidby)thosewhogeneratetheexternality.ExampleNegativeexternality,e.g.PollutionMC’:truecostsMarketproducestoomuchMCMC’MRqq*q’pCMC’q’pABMRqHowtomeasurethatthisisbad:CS+PSpPMC’q*ABMRCEDqWhatistheCS+PSwhenq*isproduced?WhatisthelossofCS+PSduetotheresponseofthefirmtothenegativeexternality?TriangleCDE.ThreesolutionsfortheexternalityproblemTaxesInternaliseactivitiesCreatemarketforexternalities(Chapter4)13.Self-interestand

Pareto-optimalitySelf-interestdoesoftennotresultinParetooptimality,e.g.prisonersdilemma.RelevantgroupTheprisonersdilemmaresultsinanoutcomewhichisnotattractivefortheinvolvedpersons,buttheoutcomemaybeattractiveforsocietyatlarge.EstablishingParetooptimalitybychangingthepayoffs,e.g.wagesstructure,financialinstruments,accountingsystem;changingtherules,e.g.organisationstructure,laws,institutions;limitingchoice;communication.FreedomversusefficiencyDisadvantageoffreedom:prisonersdilemma;Disadvantage