ECON 416 Lecture Notes - Lecture 12: Participatory Budgeting, Opportunity Cost, Marginal Utility
25 May 2017
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Document Summary
Programs where you put 20 entrepreneurs in one room, and teach them finance. Main problem: each different training program provided different results every researcher designed his own version of the training program (hard to compare) Need to re-design incentives for researchers in order to compare. One study found that the program benefits entrepreneurs because they can realize if they are good (high-ability ones) Design easy material for the training program = the low-ability people benefit more. In the process of development, market economics become more and more complex. From face-to-face transactions, the economy becomes a complicated web of interconnections and transactions become impersonal. Impersonal transactions + frictions (incomplete contracts) = opportunities. Institutions can be defined as the rules of the game; economic agents play when interacting with each other. Therefore, institutions are a set of rules which solve for incomplete contracting and allow market transactions to take place.
