Mechanism Design and Management: Mathematical Methods for Smart Organizations (for managers, academics and students)


Dmitry Novikov (Editor)
Russian Academy of Sciences, Moscow, Russian Federation

Vladimir Burkov
Professor, Moscow Institute of Physics and Technology, Moscow, Russia

Mikhail Goubko
Institute of Control Sciences, Russian Academy of Sciences, Russia

Vyacheslav Kondrat’ev
Professor and Head of Management, Department of the State University of Management, Russia

Nikolay Korgin
Associate professor, Moscow Institute of Physics and Technology, Leading researcher of the Institute of Control Sciences of Russian Academy of Sciences, Moscow Russia

Dmitry Novikov
Russian Academy of Sciences, Moscow, Russian Federation

Series: Business Issues, Competition and Entrepreneurship, Management Science – Theory and Applications
BISAC: BUS008000

Mechanism Design (MD) is a branch of game theory which deals with conflict situations involving a principal and a set of active agents (usually in the presence of asymmetric information). Mechanism design theory delivers a solution to many management problems in the form of a control mechanism, (i.e., a formalized routine of decision-making). Formal results of MD can change the fundamentals of managerial practice by introducing decision-making mechanisms in organizations, which are efficient and robust with respect to employees’ self-serving behaviour.

The proposed book seeks a more intensive application of MD methodology and its formal results in organizations. The main aim of the book is to provide readers with the basics of an MD-based view on managerial problems, so that intra-firm policies can be analysed through the looking glass of employees’ behavioural response. A systematic introduction of the underlying MD methodology is combined with a collection of ready-to-use mechanisms for solving typical management problems. The use of MD by individual managers is facilitated by bringing together mathematical and business literature in a single treatise.

This book is not a purely academic monograph as it contains as few formulas as possible, and no formal proofs (references to formal results are provided throughout the text). Courses on MD for managers are not common in business schools now, and our book represents the perfect material for such a course. (Imprint: Nova)



Table of Contents



Part I. Control Methodology: An Introduction

Chapter 1. Organization, Activity, Control

Chapter 2. Control Systems

Chapter 3. Control Efficiency

Part II. Organizational Behavior and Control Mechanisms

Chapter 4. Control of Organizational Behavior

Chapter 5. Analysis and Synthesis of Control Mechanisms

Part III. Basic Control Mechanisms

Chapter 6. Planning Mechanisms

Chapter 7. Organization Mechanisms

Chapter 8. Incentive Mechanisms

Chapter 9. Assessment and Control Mechanisms

Chapter 10. Examples of Integrated Control Mechanisms




“An important quality of the book is that it is relatively easy to read and understand the complicated issues and models of mechanism design and management from this book. I think it is a very useful book for students, academics, practitioners and policy makers. It is a suitable textbook for teaching management and mechanism design for many courses in such areas like applied game theory, economics, management science, industrial engineering, etc.” – Professor Sardar M. N. Islam (Naz) Ph.D., LL.B. (Law), Professor, College of Business, Victoria University, Australia

Audience: Engineering education and experience is typical for managers in manufacturing and IT industry. They are ready to adopt mathematical tools (even rather complicated), which can help them to achieve better results in their work. Those practitioners, who combine moderate mathematical background with interest in managerial innovations, form the main audience. From the proposed book they will learn the basics of MD theory, the methodology of mechanisms implementation in organizations, and the system of complementary basic control mechanisms, which will help them solve the most widespread problems of all stages of management activity – planning, organization, motivation, and controlling.

Additional information


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