Allocation of Economic Competence in Teams: A Comparative Institutional Analysis

Pavel Pelikan
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Pavel Pelikan: The Research Institute of Industrial Economics, Postal: Box 5501, 114 85 Stockholm, Sweden

No 480, Working Paper Series from Research Institute of Industrial Economics

Abstract: Attention 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.

Keywords: Economic competence; Human capital; Bounded rationality; Institutions; Entrepreneurs; Investors; Government; Market selection; Financial Markets; Industrial policies (search for similar items in EconPapers)
JEL-codes: D20 D92 H10 L52 O40 P51 (search for similar items in EconPapers)
Pages: 53 pages
Date: 1997-08-15
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (8)

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