The problem of motivating members of an organization to make decisions and to take actions that are congruent with the goals set by their superiors has been studied extensively. With costless incentive and information systems, the objective is to create incentives for subordinates to act in the best interests of those who determine the goals for the organization (e.g. owners, managers). However, with costly information and incentive systems, it may not always be optimal for an organization to remove goal conflicts.' In this paper, we report some results about the relationship between

Collective choice problems are studied from the Bayesian viewpoint. It is shown that the set of expected utility allocations which are feasible with incentive-compatible mechanisms is compact and convex, and includes the equilibrium allocations for all other mechanisms. The generalized Nash solution proposed by Harsanyi and Selten is then applied to this set to define a bargaining solution for Bayesian collective choice problems.

The paper investigates an econometric method for selecting macroeconomic policy rules when expectations are formed rationally. A simple econometric model of the U.S. is estimated subject to a set of rational expectations restrictions using a minimum distance estimation technique. The estimated model is then used to calculate optimal monetary policy rules to stabilize fluctuations in output and inflation, and to derive a long run tradeoff between price stability and output stability which incorporates the rationally formed expectations. The optimal tradeoff curve is compared with actual U.S. price and output stability and with the results of a monetary policy rule with a constant growth rate of the money supply. 1

A general equilibrium model is presented wherein wage labor requires monitoring in order to extract effort. Landlords may also elect to adopt sharetenancy contracts in which workers have an incentive to supply unsupervised effort. Two "distortions" exist: monitoring costs in one sector and a share "tax" in the other. Efficiency statements require second-best comparisons adopting more specific functional forms. This mixed wage-sharetenancy economy is technically efficient and provides greater Benthamite social welfare than a wage-only economy, when private incentives lead to mixing. The incidence of sharetenancy is hypothesized to increase with monitoring costs, density of tenants per landlord, and labor intensity of production.

A general equilibrium model is presented wherein wage labor requires monitoring in order to extract effort. Landlords may also elect to adopt sharetenancy contracts in which workers have an incentive to supply unsupervised effort. Two "distortions" exist: monitoring costs in one sector and a share "tax" in the other. Efficiency statements require second-best comparisons adopting more specific functional forms. This mixed wage-sharetenancy economy is technically efficient and provides greater Benthamite social welfare than a wage-only economy, when private incentives lead to mixing. The incidence of sharetenancy is hypothesized to increase with monitoring costs, density of tenants per landlord, and labor intensity of production.

Reviews the book "Advanced Accounting," by Andrew A. Haried, Leroy F. Imdieke and Ralph E. Smith.

Reviews the book "Management Control and Decision Systems," by Alan L. Patz and Alan J. Rowe.

B. Curtis Eaton, Richard G. Lipsey; A Comment on Location and Industrial Efficiency with Free Entry, The Quarterly Journal of Economics, Volume 93, Issue 3