Organizational Economics Reading List

Here’s the reading list for the undergraduate seminar in Organizational Economics that I taught this semester.

Method and the Firm    1. Leeson: “Economics is Not Statistics (and Vice Versa)”  

2. Langlois: “The Institutional Approach to Economic History: Connecting the Two Strands”  

3. Coase: “The Nature of the Firm”  

4. Allen: “Transaction Costs”
Transaction Cost Economics  5. Klein et al.: “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process”    

6. Klein and Shelanski: “Empirical Research in Transaction Cost Economics: A Review and Assessment” (optional)
Measurement  7. Barzel: “Measurement Costs and the Organization of Markets”  

8. Alchian and Demsetz: “Production, Information Costs, and Economic Organization” (optional)
Agency  9. Manne: “Mergers and the Market for Corporate Control”  

10. Silverman and Ingram: “Asset Ownership and Incentives in Early Shareholder Capitalism: Liverpool Shipping in the Eighteenth Century”
Labor Contracts11. Chisholm: “Profit-Sharing versus Fixed-Payment Contracts: Evidence from the Motion Pictures Industry”

If time permits: Austrian Perspectives on the Firm    
12. Hansmann: “Ownership of the Firm”  

13. Klein: “Economic Calculation and the Limits of Organization”

14. Langlois: “The Austrian Theory of the Firm: Retrospect and Prospect”

15. Piano and Rouanet: “Economic Calculation and the Organization of Markets” (optional—on mygcc)   

16. Foss and Klein: “Entrepreneurship and the Economic Theory of the Firm: Any Gains from Trade?” (optional—on mygcc)
Hybrids    17. Dnes: “A Case-Study Analysis of Franchise Contracts”  

18. Menard: “The Economics of Hybrid Organizations” (optional)
Contracts, Brands, Quality   19. Klein and Leffler: “The Role of Market Forces in Assuring Contractual Performance”  

20. Png and Reitman: “Why are some Products Branded and Others Not?”   
Non-Profits       21. Hansmann: “Economic Theories of Nonprofit Organization” (pp. 28-37)  

22. Allen: “Order in the Church: A Property Rights Perspective”
Clubs    23. Leeson: “Governments, Clubs, and Constitutions”  

24. Barzel and Sass: “The Allocation of Resources by Voting”  

25. Greif: “The Fundamental Problem of Exchange” (pp. 265-272)
Criminal Organizations           26. Leeson: “An-arrgh-chy: The Law and Economics of Pirate Organization”  

27. Leeson and Rogers: “Organizing Crime”

28. Skarbek et al.: “The Organization of Danish Gangs: A Transaction Cost Approach”
Bureaucracies       29. Mises: Bureaucracy (pp. 40-56)  

30. Coyne: “The Politics of Bureaucracy and the Failure of Post-War Reconstruction”  
Families     31. Brinig: “Rings and Promises”  

32. Bring and Crafton: “Marriage and Opportunism”   
Miscellaneous Topics   33. Piano: “Organizing High-End Restaurants” (on mygcc)  

34. Wernerfelt and Simester: “Determinants of Asset Ownership: A Study of the Carpentry Trade”  

35. Brown: “University Governance and Academic Tenure: A Property Rights Explanation”

I don’t know of many other undergraduate organizational economics courses in United States colleges/universities. However, there are a few noteworthy exceptions that deserve a shout-out. Tom Nonnenmacher at nearby Allegheny College has an excellent course in “Organizations and Contracts.” Also, check out his book on “institutional and organizational analysis.”

Dick Langlois at UConn has a course called “The Economics of Organization.”

An old Peter Klein class also looks great, though geared toward PhD students. Jens Prufer’s reading list is great, but also looks like a graduate-level course.

Of course, there are a few classics missing from my reading list. That’s because I take a broad view of what’s encompassed by organizational economics (as does Prufer’s syllabus). Rather than an exclusive focus on the for-profit firm, we also discuss non-profits, criminal organizations, families, bureaucracies, and states. This is along the lines of what Robert Gibbons and John Roberts write in an overview of the field:

Moving beyond business firms, we also hope to see much more research on different organizational forms. Legislatures, government bureaus and departments, courts, political parties, clubs, cooperatives, mutuals, family firms, state-owned enterprises, charities and not-for-profits, hospitals, universities, and schools—all raise interesting organizational issues and deserve more attention than they have received.

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