Tag Archives: Myerson

The Game Theoretical CEO: An Inexplicable Lawful Agent

By William K. Black
(Cross posted at Benzinga.com)

Introduction

This is the sixth (and final) of my series of articles on the work of Roger Myerson, a 2007 Laureate in Economics.  Myerson’s work on CEOs is typical of the game theoretical approach to explaining the behavior of CEOs and firms, so I am discussing an exemplar rather than an outlier.  This installment discusses some of the fatal flaws that I argue characterize the game theoretical work on CEOs by the Laureates.  I will urge that they are weakest where they believe they are strongest – their models.  The article explains why the models are specified incorrectly because the models have no coherent theory (or understanding) of fraud or ethics.  The game theoretical Laureates (Laureates) make unsupportable implicit assumptions that are belied by the data and internally inconsistent with their explicit assumptions.

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Myerson’s Ode to Crony Capitalism

By William K. Black

This is the fifth installment in my series of article about the predictive and policy failures of Roger Myerson, Nobel Laureate in economics in 2007.  My first two articles critiqued his claim that capitalism’s unique advantage over communism is plutocracy because only exceptionally wealthy CEOs can be successfully bribed by their shareholders to “imitate” “good” CEOs who will not cheat the shareholders.

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Myerson’s misses the Miasma that is Modern Executive Compensation

By William K. Black

This is the fourth installment of my exploration of the work of Roger Myerson, Nobel Laureate in economics in 2007.  It is part of what will be a broader series of articles exploring why economics is unique among the sciences in awarding the Prize to scholars whose predictive work proves profoundly wrong and leads to public policies that cause great harm.  The first installment used Myerson’s Prize lecture to explore his paean to plutocracy as the purported unique advantage of capitalism.

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