James Malcomson is a British-Irish economist. He is an emeritus Professor of Economics at the University of Oxford and emeritus Fellow of All Souls College. He is a specialist in the fields of labour economics and contract theory.
Education Following graduation with a BA in economics at Gonville and Caius College, Cambridge, in 1967, Malcomson studied for a doctorate in economics at Harvard University, which he completed in 1973Who's Who 2023 (Bloomsbury, 2022). https://www.bloomsbury.com/uk/whos-who-2023-9781472991287/ with a thesis supervised by the Nobel laureate Wassily Leontief.
Career Malcomson was a lecturer, then senior lecturer, at the University of York (1972–85), Professor of Economics at the University of Southampton (1985–1999) and then statutory Professor of Economics at the University of Oxford and Fellow of All Souls College (1999–2013). He was elected Fellow of the British Academy in 2000 and Fellow of the Econometric Society in 2005.Who's Who 2023 (Bloomsbury, 2022). https://www.bloomsbury.com/uk/whos-who-2023-9781472991287/ He chaired the Office of Health Economics Commission on Competition in the NHS, 2011–2012Office of Health Economics Commission on Competition in the NHS, Competition in the NHS, Report of the Office of Health Economics Commission, January 2012. https://www.ohe.org/publications/report-office-health-economics-commission-competition-nhs/ and served as a member of the Review Body on Doctors' and Dentists' Remuneration, 2015–2021.https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1005003/DDRB_2021_Web_Accessible_v2.pdf p. iii. Retrieved 24 November 2023.
Research Malcomson's early research analysed vintage effects in investment, especially the implications for obsolescence, replacement and utilisation of capital equipment and the effects of tax policy on these. He derived rigorous theoretical models of optimal investment and replacement that do not rely on stationarity (1),Morton I. Kamien and Nancy L. Schwartz, Dynamic Optimization (2nd edition, Dover, 2012), p. 361. https://store.doverpublications.com/048648856x.html showed how optimal policies relate to simple rules, and derived analytic results for the effects of changes in tax policy on investment and replacement (3).Mark Blaug and Howard Vane (eds.), Who's Who in Economics (4th edition), (Edward Elgar, 2003). https://www.e-elgar.com/shop/gbp/who-s-who-in-economics-fourth-edition-9781840649925.html He also devised ways to estimate such models empirically without imposing stationarity, an essential step in predicting the short-run effects of tax policy changes (2).E. Bjørn, Taxation, Technology, and the User Cost of Capital (Elsevier, 19892), p. 12. https://www.sciencedirect.com/bookseries/contributions-to-economic-analysis/vol/182/suppl/CTerry Barker, Paul Ekins and Nick Johnstone (eds.), Global Warming and Energy Demand (Routledge, 1994), p. 124. eBook He additionally explored dynamic inconsistency in government policies (6),Keith Blackburn and Michael Christensen, "Monetary policy and policy credibility: theories and evidence", Journal of Economic Literature, 27(1), 1989, p. 12. Print Online the Laffer Curve (7),John Kay, "Tax policy: a survey", Economic Journal, 100(399), 1990, p. 35. Print Online and the impact of trade unions (9).Pierre Cahuc. Stéphane Carcillo and André Zylberberg, Labor Economics (MIT Press, 2014), pp. 755, 780. https://mitpress.mit.edu/9780262027700/labor-economics/
Malcomson's empirical research on production convinced him of the need for economists to understand better the labour side of the production process and much of his more recent research has been directed towards that.Mark Blaug and Howard Vane (eds.), Who's Who in Economics (4th edition), (Edward Elgar, 2003). https://www.e-elgar.com/shop/gbp/who-s-who-in-economics-fourth-edition-9781840649925.html One of his main concerns has been with different ways of motivating employees when important aspects of performance are not easily specified in an employment contract and their implications: high pay coupled with the threat of dismissal for unsatisfactory performance (efficiency wages) (4),Oliver Hart and Bengt Holmström, "The theory of contracts" in Truman F. Bewley (ed.), Advances in Economic Theory (Cambridge University Press, 1987), p. 123. Online https://www.cambridge.org/core/services/aop-cambridge-core/content/view/19C16ACE4A35CB03AA5B4C89E69C20FE/9781139052054c03_p71-156_CBO.pdf/theory_of_contracts.pdfLewis A. Kornhauser and W. Bentley MacLeod, "Contracts between legal persons" in Robert Gibbons and John Roberts (eds.), Handbook of Organizational Economics (Princeton University Press, 2013), p. 929. https://press.princeton.edu/books/ebook/9781400845354/the-handbook-of-organizational-economics competition for promotion (5),Oliver Hart and Bengt Holmström, "The theory of contracts" in Truman F. Bewley (ed.), Advances in Economic Theory (Cambridge University Press, 1987), p. 122. Online https://www.cambridge.org/core/services/aop-cambridge-core/content/view/19C16ACE4A35CB03AA5B4C89E69C20FE/9781139052054c03_p71-156_CBO.pdf/theory_of_contracts.pdfRobert Gibbons and Michael Waldman, "Careers in organizations: theories and evidence" in Orley C. Ashenfelter and David Card (eds.), Handbook of Labor Economics, Volume 3B (Elsevier, 1999), pp. 2401-2402. https://www.sciencedirect.com/handbook/handbook-of-labor-economics/vol/3/part/PBRobert Gibbons and John Roberts, "Economic theories of incentives in organizations" in Robert Gibbons and John Roberts (eds.), Handbook of Organizational Economics (Princeton University Press, 2013), p. 67. https://press.princeton.edu/books/ebook/9781400845354/the-handbook-of-organizational-economicsMichael Waldman, "Theory and evidence in internal labor markets" in Robert Gibbons and John Roberts (eds.), Handbook of Organizational Economics (Princeton University Press, 2013), pp. 528-529. https://press.princeton.edu/books/ebook/9781400845354/the-handbook-of-organizational-economics tournaments (8)Oliver Hart and Bengt Holmström, "The theory of contracts" in Truman F. Bewley (ed.), Advances in Economic Theory (Cambridge University Press, 1987), p. 89. Online https://www.cambridge.org/core/services/aop-cambridge-core/content/view/19C16ACE4A35CB03AA5B4C89E69C20FE/9781139052054c03_p71-156_CBO.pdf/theory_of_contracts.pdf and repeated interaction over time (10),Oliver Hart and Bengt Holmström, "The theory of contracts" in Truman F. Bewley (ed.), Advances in Economic Theory (Cambridge University Press, 1987), p. 98. Online https://www.cambridge.org/core/services/aop-cambridge-core/content/view/19C16ACE4A35CB03AA5B4C89E69C20FE/9781139052054c03_p71-156_CBO.pdf/theory_of_contracts.pdf which "showed that the optimal long-term contract can be replicated by a sequence of optimal static contracts when the agent's saving decision can be controlled by the principal."Jean-Jacques Laffont and David Martimort, The Theory of Incentives (Princeton University Press, 2002), pp. 332-333. https://press.princeton.edu/books/paperback/9780691091846/the-theory-of-incentives With W. Bentley MacLeod, he characterized the full set of outcomes that can be sustained in such repeated principal-agent contexts (12), described as "the "classic" relational contract model"W. Bentley MacLeod, Advanced Microeconomics (MIT Press, 2022), p. 267. https://mitpress.mit.edu/9780262046879/advanced-microeconomics-for-contract-institutional-and-organizational-economics/ and "(t)he most complete analysis of relational contracts under symmetric information".Patrick Bolton and Mathias Dewatripont, Contract Theory (MIT Press, 2005), p. 462. https://mitpress.mit.edu/9780262025768/contract-theory/ Together they also showed in (11) that tournaments and competition for promotion can provide effective methods of motivation provided agent-employees are sufficiently heterogeneous in their abilities, a system that "mimics a remarkable number of the features of actual job ladders in internal labor markets".Paul Milgrom and John Roberts, Economics, Organization and Management (Prentice-Hall, 1992), p. 374. https://api.semanticscholar.org/CorpusID:152523816 Performance-related bonuses are effective even when agent-employees are homogeneous but may result in less efficient outcomes than efficiency wages when prospective employees are plentiful relative to jobs (18).Robert Gibbons and Michael Waldman, "Careers in organizations: theories and evidence" in Orley C. Ashenfelter and David Card (eds.), Handbook of Labor Economics, Volume 3B (Elsevier, 1999), p. 2390. https://www.sciencedirect.com/handbook/handbook-of-labor-economics/vol/3/part/PB But when employees differ in abilities, competition for promotion may be open to influence activities and so distort allocation of employees to more senior jobs (21)Patrick Bolton and Mathias Dewatripont, Contract Theory (MIT Press, 2005), p. 316. https://mitpress.mit.edu/9780262025768/contract-theory/Edward P. Lazear and Paul Oyer, "Personnel Economics" in Robert Gibbons and John Roberts (eds.), Handbook of Organizational Economics (Princeton University Press, 2013), pp. 483, 495. https://press.princeton.edu/books/ebook/9781400845354/the-handbook-of-organizational-economicsMichael Waldman, "Theory and evidence in internal labor markets" in Robert Gibbons and John Roberts (eds.), Handbook of Organizational Economics (Princeton University Press, 2013), p. 532. https://press.princeton.edu/books/ebook/9781400845354/the-handbook-of-organizational-economics and efficient outcomes in the future prevent full separation of abilities when differences are sufficiently fine (26) in which "Malcomson provides a general analysis of relational contracts with persistent private information. He shows that full revelation of information is inconsistent with continuation payoffs being on the Pareto frontier, and therefore it generalizes the observation that asymmetric information leads to conflict in relational contracts."W. Bentley MacLeod, Advanced Microeconomics (MIT Press, 2022), p. 331. https://mitpress.mit.edu/9780262046879/advanced-microeconomics-for-contract-institutional-and-organizational-economics/ This approach has been taken up in the subsequent literature.David Martimort, Aggey Semenov and Lars Stole, "A theory of contracts with limited enforcement", Review of Economic Studies, 84(2), 2017, p. 820. Print ISSN 0034-6527 Online ISSN 1467-937X https://doi.org/10.1093/restud/rdw024 These results have implications for dual economies (18) and cyclical behavior (14), in which the "interplay between competition and relational contracts also has implications for output over the business cycle".W. Bentley MacLeod, Advanced Microeconomics (MIT Press, 2022), p. 275. https://mitpress.mit.edu/9780262046879/advanced-microeconomics-for-contract-institutional-and-organizational-economics/ The implications for labour markets are surveyed in (15) and, more completely, in (19)Pierre Cahuc. Stéphane Carcillo and André Zylberberg, Labor Economics (MIT Press, 2014), p. 325. https://mitpress.mit.edu/9780262027700/labor-economics/ and those for economic organizations in (25).