The Economics of Contracting Public Project

Abebe Tolla

ISBN 10: 365949027X / ISBN 13: 9783659490279

Published by LAP LAMBERT Academic Publishing Dez 2013, 2013

About this Item

This item is printed on demand - Print on Demand Titel. Neuware -This book gives insights to answer the problem that faces public organization in delegating their mega projects to their agents in three level of hierarchical model. Taking three players: the politician, the bureaucrat and the contractor, I developed a three level hierarchical adverse selection model. In the model the bureaucrat is an agent to the politician and the contractor in turn is also an agent to the bureaucrat. Each player in the game has their own strategies that enable them to determine their payoffs. Basically the players apply the technique of backward induction either to deal with the project work or not. The same process also helps us to determine the outcome (Nash equilibrium) of the game. In this game players have a complete information of their types but have a blurt information about the other players type. In the principal agent model the prevalent problem is the problem of information asymmetry between the principal and his/her agent. The agent knows his/her type for sure but the principal knows the true types of his/her agent with certain probabilities. This is the adverse selection problem that should be mitigated somehow.VDM Verlag, Dudweiler Landstraße 99, 66123 Saarbrücken 52 pp. Englisch.

Seller Inventory # 9783659490279

Bibliographic Details

• Title: The Economics of Contracting Public Project
• Publisher: LAP LAMBERT Academic Publishing Dez 2013
• Publication Date: 2013
• Language: English
• ISBN 10: 365949027X
• ISBN 13: 9783659490279
• Binding: Taschenbuch
• Condition: Neu
• Dimensions: 220W x 150H x 4D millimeters 220 millimeters width by 150 millimeters height by 4 millimeters depth
• Weight: 96 grams

About this title

Synopsis

This book gives insights to answer the problem that faces public organization in delegating their mega projects to their agents in three level of hierarchical model. Taking three players: the politician, the bureaucrat and the contractor, I developed a three level hierarchical adverse selection model. In the model the bureaucrat is an agent to the politician and the contractor in turn is also an agent to the bureaucrat. Each player in the game has their own strategies that enable them to determine their payoffs. Basically the players apply the technique of backward induction either to deal with the project work or not. The same process also helps us to determine the outcome (Nash equilibrium) of the game. In this game players have a complete information of their types but have a blurt information about the other players type. In the principal agent model the prevalent problem is the problem of information asymmetry between the principal and his/her agent. The agent knows his/her type for sure but the principal knows the true types of his/her agent with certain probabilities. This is the adverse selection problem that should be mitigated somehow.

About the Author

An Economist and Information system analyst by profession, Abebe Simie, works with business owners and non profit organization. His dual profession helps him to understand problems from different angles and sharpen him to provide the best solution out of the possible solutions to the problem.