A mechanism is a mathematical structure that models institutions through which economic activity is guided and coordinated. There are many such institutions; markets are the most familiar ones. Lawmakers, administrators and officers of private companies create institutions in orders to achieve desired goals. They seek to do so in ways that economize on the resources needed to operate the institutions, and that provide incentives that induce the required behaviors. This book presents systematic procedures for designing mechanisms that achieve specified performance, and economize on the resources required to operate the mechanism, i.e., informationally efficient mechanisms. Our systematic design procedures are algorithms for designing informationally efficient mechanisms. Most of the book deals with these procedures of design. When there are finitely many environments to be dealt with, and there is a Nash-implementing mechanism, our algorithms can be used to make that mechanism into an informationally efficient one. Informationally efficient dominant strategy implementation is also studied.

"An accessible and self-contained treatment of the current state of thinking about rationality in economics and other social sciences"--

"This is the first of four volumes of the collected papers of Leonid Hurwicz, one of the premier mathematical economists of the 20th century whose research spanned over 6 decades. A co-recipient of the 200 7NobelMemorial Prize (with Eric Maskin and Roger Myerson) for "laying the foundations of mechanism design" - the design of decentralized institutions to bring about socially desirable outcomes when markets may fail to do so - Leo's contribution to economics has been far wider, ranging from econometrics, programming, and decision theory to microeconomic theory. It has been said that his classic 1971 paper with Hirofumi Uzawa on the integrability of demand functions alone qualifed him for the Nobel"--

This compact and original exposition of optimal control theory and applications is designed for graduate and advanced undergraduate students in economics. It presents a new elementary yet rigorous proof of the maximum principle and a new way of applying the principle that will enable students to solve any one-dimensional problem routinely. Its unified framework illuminates many famous economic examples and models. This work also emphasizes the connection between optimal control theory and the classical themes of capital theory. It offers a fresh approach to fundamental questions such as: What is income? How should it be measured? What is its relation to wealth? The book will be valuable to students who want to formulate and solve dynamic allocation problems. It will also be of interest to any economist who wants to understand results of the latest research on the relationship between comprehensive income accounting and wealth or welfare.