Allocation of Economic Competence in Teams: A Comparative Institutional Analysis
AbstractAttention is called to a little explored scarce resource, termed 'economic competence', which combines features of human capital and bounded rationality, and causes a singularity in resource-allocation in society. The performance of each economy is shown to strongly depend on how this resource is allocated, which in turn strongly depends upon the economy's institutions ('rules of the game'). Two stylized institutional variants of market selection and one of government selection are compared for their short-term and long-term effects upon the output and growth of a perfect team economy. The results are exemplified by throwing new light on the social value of financial markets and the limitations of industrial policies.
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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 480.
Length: 53 pages
Date of creation: 15 Aug 1997
Date of revision:
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Economic competence; Human capital; Bounded rationality; Institutions; Entrepreneurs; Investors; Government; Market selection; Financial Markets; Industrial policies;
Find related papers by JEL classification:
- D20 - Microeconomics - - Production and Organizations - - - General
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- H10 - Public Economics - - Structure and Scope of Government - - - General
- L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
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