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Analysis and Optimization of Systems pp 357–383Cite as

A control-theoretic view on incentives

  • Games, Theory And Applications
  • Conference paper
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Part of the book series: Lecture Notes in Control and Information Sciences ((LNCIS,volume 28))

Abstract

The idea of declaring a reward (punishment) for a decision maker according to his particular choice of action in order to induce certain "desired" behavior on the part of the decision maker is known as incentive (threat). This practice is age old. However, only in recent years have the notions been formalized. In the development of a control-theoretic view on incentives, we first investigate the deterministic version of the incentive problem. This reveals the basic simple idea behind the problem. It also illustrates the different possibilities introduced by the presence of dynamics and multi-follower nature of the problem. This is followed by two variants of the stochastic version of the problem where we concentrate on the role of uncertainties. Relationship to economic literature is also discussed.

The research reported in this paper was supported by the Department of Energy under Contract ET-78-C-01-3252, the National Science Foundation under Grant ENG 78-15231, and by the U.S. Office of Naval Research under the Joint Services Electronics Program by Contract N00014-75-0648.

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Author information

Author notes

  1. Peter B. Luh

    Present address: Electrical Engineering and Computer Science Dept., University of Connecticut, 06268, Storrs, CT

Authors and Affiliations

  1. Division of Applied Sciences, Harvard University, Pierce Hall, 02138, Cambridge, MA

    Yu-Chi Ho

  2. Harvard University and Bolt Beranek and Newman, Inc., 10 Moulton Street, 02138, Cambridge, MA

    Peter B. Luh

  3. Department of Applied Mathematics, Twente University of Technology, P. O. Box 217, 7500, AE Enschede, The Netherlands

    Geert Jan Olsder

Authors
  1. Yu-Chi Ho
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  2. Peter B. Luh
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  3. Geert Jan Olsder
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Editor information

A. Bensoussan J. L. Lions

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© 1980 Springer-Veralg

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Ho, YC., Luh, P.B., Olsder, G.J. (1980). A control-theoretic view on incentives. In: Bensoussan, A., Lions, J.L. (eds) Analysis and Optimization of Systems. Lecture Notes in Control and Information Sciences, vol 28. Springer, Berlin, Heidelberg. https://doi.org/10.1007/BFb0004054

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  • DOI: https://doi.org/10.1007/BFb0004054

  • Published:

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-10472-8

  • Online ISBN: 978-3-540-38489-2

  • eBook Packages: Springer Book Archive

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