Eric Maskin Research Articles

Martin Weitzman: A Gift That Keeps on Giving

Martin Weitzman: A Gift That Keeps on Giving

Time and the Generations: Population Ethics for a Diminishing Planet. Kenneth J. Arrow Lecture Series. By Partha Dasgupta; with Robert Solow, Scott Barrett, Eric Maskin, Joseph Stiglitz, and Aisha Dasgupta; with reflections from Kenneth J. Arrow. New York: Columbia University Press. $28.00. xlvii + 296 p.; ill.; author and subject indexes. ISBN: 9780231160124 (hc); 9780231550031 (eb). 2019.

Previous articleNext article No AccessHistory, Philosophy, and Ethics of BiologyTime and the Generations: Population Ethics for a Diminishing Planet. Kenneth J. Arrow Lecture Series. By Partha Dasgupta; with Robert Solow, Scott Barrett, Eric Maskin, Joseph Stiglitz, and Aisha Dasgupta; with reflections from Kenneth J. Arrow. New York: Columbia University Press. $28.00. xlvii + 296 p.; ill.; author and subject indexes. ISBN: 9780231160124 (hc); 9780231550031 (eb). 2019.James R. ThobabenJames R. ThobabenSchool of Theology & Formation, Asbury Theological Seminary, Wilmore, Kentucky Search for more articles by this author PDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The Quarterly Review of Biology Volume 96, Number 1March 2021 Published in association with Stony Brook University Article DOIhttps://doi.org/10.1086/713228 Views: 45Total views on this site For permission to reuse, please contact [email protected]PDF download Crossref reports no articles citing this article.

ParthaDasgupta, Time and the Generations: Population Ethics for a Diminishing Planet. New York: Columbia University Press, 2019. xliv + 296 p. $28.00

ParthaDasgupta, Time and the Generations: Population Ethics for a Diminishing Planet. New York: Columbia University Press, 2019. xliv + 296 p. $28.00

Economics for the Curious. Inside the Minds of 12 Nobel Laureates

1. Depressions are Different Paul Krugman 2. Rethinking Economics: A Classical Perspective Vernon L. Smith 3. Employment and Unemployment Peter Diamond 4. Unemployment During and After the Great Recession Dale T. Mortensen 5. Long Term Trends and Stuctural Change in the Global Economy Michael Spence 6. On Policy Consistency Finn E. Kydland 7. Natural Resources and Sustainability Robert Solow 8. Research Studies Approaching Cooperative Games with New Methods John F. Nash, Jr 9. Interdisciplinary Social Science: The Transaction Cost Economics Project Oliver E. Williamson 10. Financing Retirement William F. Sharpe 11. How Should We Elect Our Leaders? Eric Maskin 12. Standards for State-Building Interventions Roger Myerson

The Arrow Impossibility Theorem (Kenneth J. Arrow Lecture Series) by Eric Maskin and Amartya Sen with Kenneth J. Arrow, Partha Dasgupta, Prasanta K. Pattanaik, Joseph E. Stiglitz. Columbia University Press: New York, 2014, 168pp.

The Arrow Impossibility Theorem (Kenneth J. Arrow Lecture Series) by Eric Maskin and Amartya Sen with Kenneth J. Arrow, Partha Dasgupta, Prasanta K. Pattanaik, Joseph E. Stiglitz. Columbia University Press: New York, 2014, 168pp.

Change everything: creating an economy for the common good

* Foreword by Eric Maskin * Preface * 1 A broken system * 2 Defining the economy for the common good * 3 The democratic bank * 4 Property * 5 Motivation and meaning * 6 Advancing democracy * 7 Real world examples * 8 Putting it into practice * Appendix 1 Frequently asked questions * Appendix 2 Facts, figures and a twenty-point summary

Diseño de mecanismos como herramienta para alcanzar objetivos socialmente deseables

En este artículo se reflexiona acerca de la importancia de la teoría del diseño de mecanismos como herramienta para alcanzar objetivos socialmente deseables. El propósito general es explicar cómo este tópico avanzado de la ciencia económica permite hacer asignaciones óptimas de los recursos cuando el intercambio se encuentra sujeto a la existencia de información asimétrica entre las partes. En primer lugar, se presentan las bases conceptuales del diseño de mecanismos y los aportes teóricos por los cuales Leonid Hurwicz, Roger Myerson y Eric Maskin fueron galardonados con el Premio Nobel de Economía en 2007. En segundo lugar, se exponen los fundamentos metodológicos de la teoría. La literatura muestra que para guiar las transacciones y conseguir resultados predeterminados es necesario que el principal implemente arreglos institucionales que induzcan a los agentes a revelar su información privada para compatibilizar sus incentivos.

The 2007 Nobel Memorial Prize in Mechanism Design Theory

AbstractThis paper provides an overview of mechanism design theory, and explains the roles played by Leonid Hurwicz, Eric Maskin and Roger Myerson in the development of this field.

Theory of Mechanism Design <i>(2007 Nobel Prize in Economics)</i>

The paper outlines the basics of the mechanism design theory and describes the defining contribution of Leo Hurwiсz, Eric Maskin, and Roger Myerson, the Nobel prize winners in economics in 2007. It starts by introducing the concepts of economic mechanism, incentive compatibility, and implementation, and provides a non-technical description of main results. Then it explains the relationship between theoretical foundations and real-world market mechanisms such as auctions. Finally, recent applications of the mechanism design theory to institutional analysis are discussed.

Reflections of a first-time replicator

Undergraduate students in my economics classes tend to have an unswerving trust that markets can solve any economic problem. And so it is in development economics, where they mainly tend to come down on the side of “development through growth” when we address whether there is a role for aid, for example, in poverty alleviation in developing economies. The issues, of course, are thorny. How do we define the poverty level? How often is growth pro-poor? What is pro-poor growth? How do we evaluate growth that increases incomes but also increases income inequality? In the Fall of 2003 I became aware of Hyun Hwa Son’s Economics Letters paper, “A Note on Pro-poor Growth.” That paper suggested a new, unambiguous measure of the pro-poorness of growth. I shared it with my class, noting that in her analysis positive growth spells were unambiguously pro-poor about as often as they were unambiguously not pro-poor or immiserizing. How could economic growth be bad for the poor about 50% of the time, they puzzled? It was certainly a provocative result. I had noticed Dr. Son’s paper because I was in the midst of some research looking at the impact of non-renewable resource extractive activity on growth and poverty. Since Economics Letters does not facilitate replication through a data archiving policy, I asked Dr. Son for her data set, and she kindly sent it to me. I had no intention of replicating her results, but one of the first things I noted about her data set was that it contained only 240 observations, versus her statement in Table 2 of her paper that there were 241 growth spells. I then noted that I could not replicate many of her growth spell classifications. In my analysis of her data, positive growth spells were about twice as likely to be pro-poor as not pro-poor. My students were much happier with these new results. By February 2004 I had written a short paper outlining the new results. That paper is essentially what is being published here, though it did not have the emphasis on replicability. I sent the paper to Dr. Son asking for her comments, but heard nothing back from her. Thinking that correcting false analysis was an important contribution to what I do as an economist, on March 9, 2004 I sent my paper for review at Economics Letters. Eight months later to the day, November 9, 2004, I received an email from Eric Maskin, editor of the journal, informing me that my paper “has not been found suitable for publication in Economics Letters. It has been reviewed by our editorial board and an evaluation is included in the ‘Comments to Author’ section

Policy Burdens, Accountability, and the Soft Budget Constraint

In a socialist economy, when a state-owned enterprise (SOE) incurs losses, the government often provides it with additional funding, cuts its taxes, and offers other compensations. Coincidentally, the managers of an SOE also expect to receive financial assistance from the state. Such a phenomenon is called the soft budget constraint (SBC), a term coined by Janos Kornai (1986). Kornai attributes many problems in a socialist economy to the existence of the SBC. To achieve successful reform of both the SOE's and socialist economies, it is imperative to eliminate the SBC. However, the SBC phenomenon continues to exist in transitional economies, even after SOE's are privatized (World Bank, 1996 p. 45). There is a large literature on the SBC. Mathias Dewatripont et al. (1996) and Eric Maskin (1996) provide surveys on the recent literature. According to Kornai (1998), there are two types of explanations for the existence of the SBC: the exogenous and endogenous. Explanations of the first type attribute the existence of the SBC to various exogenous reasons, including the paternalism of a socialist state and the government's aims for job creation or for gaining political support (Kornai, 1986). Explanations of the second type view the SBC as an endogenous phenomenon, arising from a time-inconsistency problem (Dewatripont and Maskin, 1995). For an inefficient, uncompleted investment project, the state or creditor may have incentives to refinance the investment because the marginal benefit of refinancing exceeds the marginal cost of abandoning it. Yingyi Qian (1994) attributed the shortage of goods in socialist economies to the SBC based on such a timeinconsistency argument. In this paper, we provide another explanation for the prevalence of the SBC in socialist and transitional economies. We will argue that the SBC is rooted in the state's accountability problem. The traditional Stalinist system was designed to facilitate the establishment of certain strategic SOE's, which were not viable in a market system. To establish the nonviable SOE's, a socialist government distorted the prices of all kinds of inputs and of outputs and used administrative measures to allocate these inputs and outputs according to plans. However, due to information and coordination problems, the state could make wrong decisions regarding investment/production and fail to deliver necessary materials and inputs in time. Consequently, the state, instead of SOE's, was accountable for the failures and needed to allocate additional credits and other assistance to the SOE's in order to complete the investment and production. As such, the SBC arose. After the transition to a market economy, many strategic firms still remain nonviable in a market economy. For strategic purposes, the state needs to support these finns. Moreover, most firms in a transitional economy carry many types of policy burdens, inherited from the pretransition system (Lin et al., 1998). Because the state is accountable for the losses arising from policy burdens, the SBC phenomenon persists. In a market economy, the state's attempts to build nonviable industry and the state's policy burdens on enterprises will also lead to SBC.

Choice, Welfare, and Development: A Festschrift in Honour of Amartya K. Sen.

Professor Amartya Sen has been a distinguished and influential scholar in development economics for over twenty years, and this edited volume seeks to reflect his interests, and the inspiration he has provided for others. The editors have succeeded in creating a coherent and stimulating set of papers from well-known contributors. The volume deals with the enduring themes of Amartya Sen's work, ranging through theoretical issues of development economics to the philosophical foundation of welfare systems, and ethics in society. Contributors: Kenneth Arrow, A. B. Atkinson, Pranab Bardhan, J. L. Coles, Rajat Deb, Jean Dreze, Louis Gevers, Peter Hammond, Ravi Kanbur, Eric Maskin, Robert Nozick, Siddiq Osmani, Martin Ravallion, Kevin Roberts, Robert Solow, S. Wibaut

The Economics of Missing Markets: Information and Games.

Part 1: out-of-equilibrium beliefs and out-of-equilibrium behaviour, David M.Kreps the role of common knowledge assumptions in game theory, Adam Brandenburger and Eddie Dekel repeated games - a survey, H.Sabourian information dynamics and equilibrium, Frank Hahn. Part 2: the economics of parallel research, Partha Dasgupta strategy variables and theories of industrial organization, Christopher Doyle bargaining theory, David Canning imperfect competition and international trade, K.Gatsios. Part 3: missing markets - consequences and remedies, David M.Newberry rational expectations, information and asset markets, Margaret Bray decision-making in the presence of risk, Mark J.Machina. Part 4: theoretical modelling of banks and bank runs, Luca Anderlini optimal multi-unit auctions, Eric Maskin and John Riley labour contract theory, Tim Worrall. Part 5: intertemporal general equilibrium models, Timothy J.Kehoe sunspots, Stephen Burnell an introduction to nonlinear dynamics and its application to economics, David Kelsey. Part 6: some micro and macro implications of inventories, J.P.Thomas Keynes's liquidity preference theory - a suggested reinterpretation, Louis Makowski.

Playing Games with the Law

* Assistant Professor, Northwestern University School of Law; Research Fellow, American Bar Foundation. B.A., Yale University; J.D., Yale Law School; Ph.D. (Economics), Massachusetts Institute of Technology. Avery Katz and Daryl Warder provided helpful comments. 1. Franklin M. Fisher, Games Economists Play. A Noncooperative View, 20 RANDJ. ECON. 113, 113 (1989). Fisher's description of the ascendancy is echoed by other economists. See, e.g., Carl Shapiro, The Theory of Business Strategy, 20 RANDJ. ECON. 125, 125 (1989) (This new wave of [industrial organization] research consists almost exclusively of game-theoretic studies of behavior and performance in imperfectly competitive markets.). 2. A casual glance at any issue of the leading microeconomic journals such as RandJournal of Economics or Review of Economic Studies will reveal several game theory articles. See, e.g., Joseph Farrell & Garth Saloner, Standardization, Compatibility, and Innovation, 16 RANDJ. ECON. 70 (1985); Drew Fudenberg & Jean Tirole, Sequential Bargaining with Incomplete Information, 50 REV. ECON. STUD. 221 (1983). 3. Nobel Prize winning economist Paul Anthony Samuelson formalized the marginalist method of utility and profit maximization. See PAUL ANTHONY SAMUELSON, FOUNDATIONS OF ECONOMIC ANALYSIS (1947). 4. The new game theory is dominated by a closely knit group of co-authors which includes David Kreps, Eric Maskin, Roger Myerson, Garth Saloner, Jean Tirole, and Robert Wilson. These theorists often collaborate, and the history of game-theoretic advances turns on the axes of their academic institutions: Stanford, M.I.T., Northwestern, and Harvard. See, e.g., David M. Kreps, Paul Milgrom, John Roberts & Robert Wilson, Rational Cooperation in the Finitely Repeated Prisoners' Dilemma, 27J. ECON. THEORY 245 (1982); Eric Maskin & Jean Tirole, Correlated Equilibria and Sunspots, 43 J. ECON. THEORY 364 (1987).

The Simple Economics of Research Portfolios

Journal Article The Simple Economics of Research Portfolios Get access Partha Dasgupta, Partha Dasgupta University of Cambridge Search for other works by this author on: Oxford Academic Google Scholar Eric Maskin Eric Maskin Harvard University Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 97, Issue 387, 1 September 1987, Pages 581–595, https://doi.org/10.2307/2232925 Published: 01 September 1987

On Imperfect Information and Optimal Pollution Control

Journal Article On Imperfect Information and Optimal Pollution Control Get access Partha Dasgupta, Partha Dasgupta London School of Economics Search for other works by this author on: Oxford Academic Google Scholar Peter Hammond, Peter Hammond Stanford University Search for other works by this author on: Oxford Academic Google Scholar Eric Maskin Eric Maskin Massachusetts Institute of Technology Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 47, Issue 5, October 1980, Pages 857–860, https://doi.org/10.2307/2296917 Published: 01 October 1980 Article history Received: 01 February 1979 Accepted: 01 February 1980 Published: 01 October 1980

Introduction

The Review has a tradition of publishing papers on the subject of planning and of iterative planning procedures. On the whole, these papers have not addressed themselves at all to the important question of how the information from individual agents needed to implement a planning rule is to be elicited. The question is important because individual agents may well have an incentive to provide deliberately misleading information if this distorts the planning rule in their favour. The only minor exception to the general avoidance of this question came in brief discussions by Dreze and de la Vallee Poussin (1971) and by Malinvaud (1972), but their discussions were not thorough since the papers were more concerned with other matters. In recent years, however, particularly since the publication of Hurwicz's fundamental papers (1972), (1973), much work has been done on identifying incentive compatible planning mechanisms. These mechanisms, even if they do not necessarily encourage agents to reveal truthfully and directly the information a planner needs, at least lead to desirable outcomes even when agents do try to manipulate them. The reader who is completely unfamiliar with this field may wish to turn straight away to the early sections of the papers by Dasgupta, Hammond and Maskin and by Groves to see the incentive problem stated informally at greater length and then also formally. The papers in the present symposium have been collected and edited in collaboration with Ted Groves and Eric Maskin. They fall very naturally into an initial twofold classification, with the sole exception of Roberts. As he points out in the introduction to his paper, one can contrast global mechanisms in which each agent is concerned with the final outcome of the mechanism, with local mechanisms in which each agent is concentrating on the utility gain from each step of an iterative planning procedure. The first six papers and the last section of Roberts, all concern themselves with the global mechanisms. By contrast, the bulk of Roberts' paper, as well as those by Henry, by Tulkens and Zamir and by Schoumaker, all consider a particular local mechanism-namely, the specific adjustment procedure for planning with public goods which was proposed by Malinvaud (1972) and by Dreze and de la Vallee Poussin (1971). This procedure is called M.D.P. for short. The earlier papers showed that the procedure guaranteed convergence to a Pareto efficient outcome provided agents reveal their true marginal rates of substitution or demand prices throughout. Malinvaud (1972) also suggested that it would still converge, though rather more slowly, to a Pareto efficient outcome even if agents chose to misrepresent their true demand prices at each step in order to have their own utility increase as fast as possible. This slower convergence is demonstrated, for an economy with one public and one private good, by Roberts, who also shows the impossibility of guaranteeing Pareto efficient outcomes with a global mechanism, at least if agents just report their preference orderings. Henry refines Roberts' results for local mechanisms by restricting agents to announcing non-negative demand prices. He also considers the similar incentive problem which arises in a discrete version of the M.D.P. procedure, and shows that for this procedure too, convergence to a Pareto efficient outcome is guaranteed, given some mild assumptions about the agents' announcements of demand prices.

Social Choice and Individual Values.

Originally published in 1951, Social Choice and Individual Values introduced Impossibility Theorem and founded the field of social choice theory in economics and political science. This new edition, including a new foreword by Nobel laureate Eric Maskin, reintroduces Arrow's seminal book to a new generation of students and researchers. Far beyond a classic, this small book unleashed the ongoing explosion of interest in social choice and voting theory. A half-century later, the book remains full of profound insight: its central message, 'Arrow's Theorem,' has changed the way we think.-Donald G. Saari, author of Decisions and Elections: Explaining the Unexpected