What famous concept in economics did Hurwicz introduce?
Theory of Relativity
Demand and Supply Equilibrium
Discounted Cash Flow
Incentive Compatibility
Answer
**Incentive Compatibility:** Proposed by Leonid Hurwicz, this fundamental economic concept highlights the crucial aspect of economic mechanisms where every participant's best course of action is to reveal their true preferences or information, without resorting to misrepresentation or deception. This aligns incentives and ensures truthful revelation, resulting in efficient outcomes and preventing strategic manipulation in economic systems.
The Legacy of Leonid Hurwicz: Mastermind of Economics and Mathematics
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