Human Centric Design in Smartcity Technologies

Abstract

Governance can be understood as the system by which actors in society are directed and controlled. Given the trinity "Institution, Market and Organization"a pressing question is: which governance structure minimizes the transaction costs in governing and controlling in the build and service design for organizations similar to a city? We investigate the notion of the governance of common goods and the problem of organizations - how or when to balance control mechanisms. As Tirole observes there is a need to explicate incentives for all stakeholders on the basis of some measure of aggregate welfare of all stakeholders. In this paper we develop a mathematical model to explicate information needs in a bilateral contract and use these insights in the case study, initialized and inspired by the procurement process of transport services at the care institution in the Netherlands in 2020 and 2021. Our results show that the information problem emerges when the object of what is exchanged between two parties is not considered as the unit of analysis. Once we understand the nature of the bilateral exchange relationship then we are able to consider the consequences of the control loss causing transaction costs due to conflicting objectives, moral hazard, adverse selection, opportunism and so on.