Niccolò Machiavelli and the Origins of Mechanism Design

In matters of public policy, economists often design incentives and constraints so that economic actors with unrestricted preferences (including the self-interested motivations of homo economicus) will implement socially desired allocations. This paradigm, which dates to Machiavelli, contrasts sharp...

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Bibliographic Details
Published in:	Journal of economic issues Vol. 48; no. 2; pp. 267 - 278
Main Author:	Bowles, Samuel
Format:	Journal Article
Language:	English
Published:	Abingdon Routledge 01-06-2014 Myron E. Sharpe Taylor & Francis Group LLC Taylor & Francis Ltd
Subjects:	Analysis Ancient Greek Philosophy Aristotle Citizens Crowding out (Economics) crowding-out Economic actors Economic Theories Economic theory Economics Economists endogenous preferences Essence (Philosophy) Five year plans Folklore Forecasts and trends Governance Incentives Market trend/market analysis Motivation Paradigms Personal preferences (Social sciences) Public policy social preferences Society Studies The Veblen-Commons Award United States
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Summary:	In matters of public policy, economists often design incentives and constraints so that economic actors with unrestricted preferences (including the self-interested motivations of homo economicus) will implement socially desired allocations. This paradigm, which dates to Machiavelli, contrasts sharply with an earlier approach, initiated by Aristotle, in which good governance entailed the cultivation of good citizens. Modern mechanism design, contract theory, and behavioral economics provide a critical perspective on the Machiavellian paradigm, and suggest a reformulation along more Aristotelian lines.
Bibliography:	ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23 ObjectType-Article-1 ObjectType-Feature-2
ISSN:	0021-3624 1946-326X
DOI:	10.2753/JEI0021-3624480202