03_OverheadsForWeb3 - Obje s for today ctive De critical...

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ACCY 302 (Chen) Class 03 1 Objectives for today Define critical concepts specific and general knowledge decision rights and alienable rights incentives Understand knowledge, rights, and incentives in firms and markets the "rules of the game" How much decentralization? the first "rule of the game" Application of the "rules"
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ACCY 302 (Chen) Class 03 2 Critical concepts What are the different types of knowledge?
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ACCY 302 (Chen) Class 03 3 Critical concepts (continued) What is a "decision right"? What are alienable (ownership) rights? Why the distinction? these rights are separable those with alienable rights may delegate decision rights to others. .. ...but the rights to sell the resource don't have to tag along in delegation
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ACCY 302 (Chen) Class 03 4 Critical concepts (continued) When are decision rights and alienable rights located with: different people? the same person?
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ACCY 302 (Chen) Class 03 5 Critical concepts (continued) What is an incentive? How do incentives relate to decision rights? when decision rights and alienable rights are located with different people. .. ...the holder of the alienable rights needs to provide an incentive to the holder of the decision rights. .. ...to take the "best" actions with the resource
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Class 03 6 Knowledge, rights and incentives - "The rules of the game" 1) Allocate decision rights so they're closer to those with specific knowledge of how best to use a resource 2) Create a control system that: a) provides measures of performance that provide insights into how the resource was used
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This note was uploaded on 09/25/2010 for the course ACCY 302 taught by Professor Chen during the Fall '09 term at University of Illinois at Urbana–Champaign.

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03_OverheadsForWeb3 - Obje s for today ctive De critical...

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