Organizational Economics

This book is a PhD textbook in Organizational Economics. It is designed to be accessible to PhD students and advanced undergraduates. Our goal is to introduce some of the core ideas and frameworks in organizational economics, as well as to introduce students to a way of thinking about the economy that is rooted in contractual frictions. We call this way of thinking a "governance mindset." A governance mindset is rooted in the idea that in many settings, contracts, and consequently markets, are far from perfect. Organizations use a wide variety of instruments to combat these contracting frictions, and many of these instruments are understandable only if one takes seriously the frictions that underpin their use. In short, organizations are "a mess, but not a mystery," as they use a wide variety of instruments to govern difficult economic transactions.