Search Results

This chapter introduces mechanism design, which is the subject wherein games are designed so that rational play results in socially desirable outcomes. The judgment of Solomon from the Bible is used as an introductory example. The principles of mechanism design are then described. The use of the revelation principle is illustrated with an extended analysis of the Street Lamp Problem. The Clarke-Groves mechanism is briefly described. Finally, a critical review of implementation theory is offered that emphasizes its differences from mechanism design and its shortcomings.

This chapter examines noncooperative bargaining models and links them with cooperative bargaining concepts in accordance with the Nash program. Following a discussion of what matters in real-life bargaining, the case in which commitment is possible is studied using the Nash Demand Game. It is shown that a Nash equilibrium of the smoothed version of the Nash Demand Game implements the Nash bargaining solution. Nash threat games are then considered with an application to collusion in Cournot models. The case in which commitment is impossible is considered. Rubinbstein's bargaining model is introduced using one-stage and two-stage Ultimatum Games to set the scene. Rubinstein's theorem that his model has a unique subgame-perfect equilibrium is proved. The outcome is shown to converge on an asymmetric version of the Nash bargaining solution when the time interval between successive proposals becomes sufficiently small. The chapter ends with a discussion of common mistakes in applying the theory.

This chapter adopts an institutional lens in considering both the nature of health systems and ways of strengthening them. First, it reviews five widely known health system conceptual frameworks, highlighting the different types of agents, organizations, and organizational arrangements that are embedded within each framework, and identifying the nature of relationships among actors, and the institutions each identifies or implies as underpinning these relationships. Second, it presents recent thinking on health system governance — a central, but less considered, function of every health system. Third, three complementary bodies of theory (organizational and policy implementation theory, and systems thinking) that draw on institutional perspectives in considering organizational functioning and change, are briefly discussed and applied in critique of the health system frameworks. The critique highlights the dominance of a mechanical perspective of organizational functioning within existing frameworks, and a primarily command and control approach to health system strengthening. Finally, two alternative approaches to supporting change within health systems, both of which acknowledge complexity and seek institutional change, are introduced: soft systems methodology and strengthening trust-based relationships.