What are the theories of corporate management?

Contract failure theory: When the general contract mechanism cannot help consumers supervise the behavior of producers, contract failure occurs.

Contract failure and government/market imperatives complement each other: the former explains why some private goods need to be provided by non-profit organizations, while the latter theory explains why some public goods need to be provided by non-profit organizations.

Prisoner's Dilemma Theory: The Prisoner's Dilemma is a representative example of a non-zero-sum game in game theory, reflecting that the best choice for an individual is not the best choice for the group. Although the dilemma itself is only of a model nature, similar situations frequently occur in reality in terms of price competition, environmental protection, etc.

The outcome of a single prisoner's dilemma will not be the same as that of a repeated prisoner's dilemma.

In the repeated prisoner's dilemma, the game is played over and over again. Each player thus has the opportunity to "punish" the other player for his uncooperative behavior in the previous round. At this point, cooperation may emerge as an equilibrium outcome. The motivation to cheat may then be overcome by the threat of punishment, which may lead to a better, cooperative outcome. As a quantity repeatedly approaches infinity, a Nash equilibrium tends to be Pareto optimal.

The main theme of the Prisoner's Dilemma is that although the prisoners cooperate with each other and do not tell the truth, it can bring the best interests to everyone (acquittal), but in the case of unknown information, because betraying their accomplices can It brings benefits to oneself (shortening the prison term), and because recruiting oneself out can bring benefits to one's accomplices. Therefore, although betraying each other is against the best common interests, it is in one's own best interests. But in fact, it is impossible for law enforcement agencies to set up such a situation to induce all prisoners to confess, because the prisoners must consider factors other than the prison term (retaliation for betraying their accomplices, etc.) and cannot fully rely on the interests (sentence period) set by law enforcement. Consider.

Tragedy of the commons theory: Tragedy of the commons means that if there is no exclusive ownership of a resource, it will lead to overuse of the resource. The tragedy of the commons was proposed by Garrit Hadin in his article "Tragedy of Commons" published in Science magazine in 1968.

Popular explanation of the tragedy of the public land:

There is a story about herdsmen and grassland. It says that when the grassland is completely opened to herdsmen, every herdsman wants more. It is profitable to raise a cow because the increased income from raising one more cow is greater than the cost of purchasing and raising it. Although because the average amount of grass decreases, adding one cow may cause the unit profit per cow of the entire pasture to decrease. But for an individual herdsman, it is advantageous for him to add one cow. However, if all the herdsmen see this and add another cow, the grassland will be overgrazed, which will not be able to meet the needs of the cattle, causing all the herdsmen's cattle to starve to death. This story is a tragedy of public resources. Harding said: "In a society where the common good is shared, everyone, that is, everyone pursues their own best interests. This is the tragedy. Everyone is locked in a society that forces him to have no control within a limited scope. In a system that increases livestock sparingly, destruction is the destination for everyone, because in a society that believes in common property freedom, everyone pursues their own best interests.”

Information asymmetry theory: refers to the fact that in market economic activities, various types of personnel have different understandings of relevant information; those with sufficient information are often in a more advantageous position, while those with poor information personnel are in a relatively disadvantaged position. The theory of information asymmetry was proposed by three American economists - Joseph Stiglitz, George Akerlof and Michael Spence. This theory holds that: in the market, sellers know more about various information about goods than buyers do; the party with more information can benefit from the market by delivering reliable information to the party with poor information; the party with less information between the buyer and the seller Will try to obtain information from the other party; market signal display can make up for the problem of information asymmetry to a certain extent; information asymmetry is a shortcoming of the market economy. In order to reduce the harm of information asymmetry to the economy, the government should Play a powerful role. This theory provides explanations for many market phenomena such as the ups and downs of the stock market, employment and unemployment, credit rationing, commodity promotions, commodity market share, etc. It has become the core of modern information economics and has been widely used in everything from traditional agricultural products markets to modern financial markets and other fields.

Externality issues: In the modern economic theory system, the so-called "externality" is also called external effect or spillover effect. It mainly refers to the impact of an economic subject's activities on the welfare of bystanders. This kind of The impact does not occur in price-based exchanges between the parties involved, so its impact is external; if it brings welfare losses (costs) to bystanders, it can be called "negative externality"; otherwise , if it brings increased welfare (benefit) to bystanders, it can be called a “positive externality”. Public goods that all members of society can enjoy free of charge can be said to be a special case of positive externalities.

The costs and benefits of individual economic activities can be described as individual (private) costs and individual (private) benefits, and the additional costs and benefits this activity brings to bystanders are social costs and social benefits.

Externalities are widespread in economic life. During production, beekeepers release bees to increase the harvest of fruit farmers, and the company's technological inventions are used by other companies for free, etc., which will produce positive externalities; while chemical plants discharging sewage into rivers will have negative externalities. Private consumption will also produce externalities. For example, smoking and driving will cause air pollution, and playing speakers in the middle of the night will cause noise to neighbors, etc., all of which will produce negative externalities.

Public Choice Theory: It is a discipline that uses modern economics to analyze various issues of democratic constitutional government. It is traditionally within the scope of political science (the more common name for this is It is "political economy", but it should be noted that this is not to be confused with the Marxist definition of the word). Public choice theory studies the behavior of voters, politicians, and government officials, assuming that they are individuals who act out of self-interest, and thus studies their interactions in a democratic system or other similar social system. Public choice theory has also been studied using many different research tools, including studying the limitations of utility maximization, game theory, or decision theory. A large part of the analysis method of public choice theory is based on the method of empirical analysis ("what is this"); but it is used as a tool to study norms ("what should this be") to explore problems and study how to improve these problems within the constitutional system. One of the main formulas proposed by public choice theory is rational choice theory, which assumes that people's behaviors are based on selecting ways to achieve goals from limited available means. Another discipline with different research goals but the same research formula is positive political theory. Social choice theory is also a related research field.

Internality: 1. Internality refers to the costs and benefits of transactions experienced by traders but not stated in the transaction terms. Internality has both positive and negative effects. Externality Stimulation refers to stimulation caused by the external environment, such as an advertisement, a friend or neighbor buying a certain product, etc.

2. Internality refers to the transfer of knowledge, that is, screening and extracting from the external knowledge base The knowledge that people want to obtain related to specific users. Intermediation refers to finding the best source of knowledge for knowledge seekers

3. The income of an enterprise is determined by internal and external factors. Internal factors What is determined is called internality, and what is determined by external factors is called externality. From the perspective of corporate interests, there are two kinds of externality, namely external economy and external diseconomy

Rent-seeking: rent, That is rent. That is, profit, benefit, benefit. Rent seeking is the pursuit of economic gain. Refers to the pursuit of benefits through some unproductive behavior. For example, some government departments seek benefits for their own departments by setting up some charging items. Some officials use their power to obtain personal benefits, and some companies bribe officials to obtain projects, concessions or other scarce economic resources for their companies. It is an activity by some vested interests to safeguard their vested interests and redistribute them. Rent-seeking often makes government decisions or operations at the mercy of interest groups or individuals. Some of these behaviors are illegal, and some are legal and unreasonable. Often become the source of corruption, social injustice and social unrest.

There are many definitions of rent-seeking. Buchanan and others believe that "the term rent-seeking is to describe an institutionally contextualized behavior where individuals' efforts to maximize value result in social waste." , without forming social surplus. "They describe rent-seeking as a waste of resources caused by people seeking wealth transfer with the help of government protection. That is, a person is rent-seeking, which means that the person has invested in something. This kind of investment does not actually improve or even reduce productivity, but it does bring a special status or monopoly rights to investors and increase their income, and rent is the income derived from this. Therefore, the definition of rent seeking in Kolandel is an activity that wastes resources in order to compete for artificial wealth transfer. Kruger, on the other hand, sees rent-seeking as a channeling activity to obtain licenses and quotas to obtain additional revenue.

Classification of common rent-seeking behaviors:

1. Government concession.

2. Government regulations, tariffs and import and export quotas.

3. Government procurement.

? The main characteristics of rent-seeking are:

? It indirectly causes distortions in the allocation of economic resources and prevents the implementation of more efficient production methods. First, it is a direct waste of economic resources. The result of using time, energy and money to lobby may be more efficient for rent-seekers, but not efficient for society.

? Lead to other levels of rent-seeking or "rent-avoidance" activities.

In order to deal with the lobbying and bribery of rent-seekers, government staff need time and energy to fight back.

? Rent-seeking activities can be divided into legal and illegal activities.

? Enterprises seeking preferential treatment from the government and using special policies to maintain their exclusive monopoly are legal rent-seeking activities.

? Bribery and smuggling are illegal rent-seeking activities.

?Three levels of rent-seeking activities, taking taxis as an example:

?The first level is: the government artificially limits the number of taxis by issuing a limited number of business licenses quantity, then the number of taxis in the market will be less than the level of free competition. Licensing controls bring about the first level of rent-seeking activity.

The second level is: since government officials can decide the control of licenses, fighting for this position forms a second level of rent-seeking activities.

? The third level of rent-seeking activities is that excess income (part or all) will be converted into government fiscal revenue in the form of license fees. Then the competition for this part of fiscal revenue forms a third level. level of rent-seeking activities.

Arrow’s Impossibility Theorem: It is impossible to transform personal preferences into public choices while satisfying the following seemingly reasonable conditions at the same time. The conditions include: 1 Unconstrained domain

2 Completeness

3 Faithfully reflect personal preferences. If everyone thinks A is better than B, then society as a whole should also think A is better than B.

4 Transitivity

5 Independence - independence of irrelevant alternatives Not affected by irrelevant alternatives

6 No dictatorship

Voting rule issues, voters' "short-sighted effect", and voters' "rational ignorance":

Voting rules are a fair selection procedure rule for decision-making through voting.

There are two types of voting rules: unanimous consent and majority rule.

The unanimous consent rule refers to a voting rule that requires the unanimous approval of all voters to pass a policy or bill. This is the voting rule that best meets the requirements of the public interest, but because of its The essence is a one-vote veto system, so it is difficult to implement in real life; the majority vote rule refers to a voting rule that requires the approval of more than half of the voters to pass a policy or bill. It has the atmosphere of simple majority vote rule and proportion The majority vote rule often leads to circular voting and cannot reflect individual preferences, which can easily lead to government failure.

In the West, political parties make certain policy commitments during elections to gain more support from voters to ensure their election. In many cases, this policy tendency to cater to the needs of (some) voters has led to the "short-sighted effect", that is, the pursuit of short-term goals at the expense of long-term interests.

The so-called "rational ignorance" refers to the behavior of people being unable to obtain certain information and knowledge when faced with huge costs and uncertainties in information search.