List of tables and figures; Series editors' preface; Acknowledgements; Part I. Why Have Hierarchy?: 1. Market failures and hierarchical solutions: the tension between individual and social rationality; 2. Bargaining failure: coordination, bargaining, and contracts; 3. Voting failure: social choice in a dictatorial hierarchy; Part II. Managerial Dilemmas: 4. Horizontal dilemmas: social choice in a decentralised hierarchy; 5. Vertical dilemmas: piece-rate incentives and credible commitments; 6. Hidden action in hierarchies: principals, agents, and teams; 7. Hidden information in hierarchies: the logical limits of mechanism design; 8. Hierarchical failures and market solutions: can competition create efficient incentives for managers? Part III. Cooperation and Leadership: 9. The possibilities of cooperation: repeated vertical dilemmas; 10. The indeterminacy of cooperation: conventions, culture, and commitments; 11. The political economy of hierarchy: commitment, leadership and property rights; Epilogue: politics, rationality, and efficiency; References; Name index; Subject index.