AEP-20806 Institutional Economics and Economic Organisation Theory

Course

Credits 6.00

Language of instruction:

English

Assumed knowledge on:

DEC-10306 or ECH-10406

Contents:

This course presents and discusses theories explaining the formation and functioning of organisations (e.g. firms) and the transactions they perform with suppliers of inputs and demanders of their outputs. Subjects:
- transaction cost theory: explains the make-or-buy decision, the choice of governance structure, and boundaries of the firm;
- information economics: how a lack of information affects economic choices;
- principal/agent or agency and contract theory: how incomplete contracts affect the efficiency of transactions;
- institutional economics: how formal institutions (e.g., laws) and informal institutions (e.g., norms) affect economic behaviour;
- social capital theory: the role of social capital and how trust can reduce transaction costs;
- property rights theory: what it means to be the owner of an asset and why asset ownership matters;
- behavioural theory of the firm: the strategy of a firm as the outcome of a negotiation process among multiple stakeholders;
- resource based view: firm-specific resources as a basis for competitiveness.

Learning outcomes:

At the end of this course the student is expected to be able to:
- recognise the causes and effects of transaction costs;
- understand the above mentioned theories;
- understand coordination and motivation mechanisms;
- analyse the behaviour of organizations.

Activities:

- attending lectures and studying the reader and book;
- working on problem sets / doing exercises;
- writing an essay.

Examination:

- written examination, for more information see course guide;
- assignment.

Literature:

Required reading /literature: see course guide.The course is supported by a Blackboard site.