Economics 486

The Economics of Organization

Spring 2002
Mondays 3:30 p.m.
Room 221 Monteith
R. N. Langlois

Syllabus and Reading List

Texts. I have asked the bookstore to order the following:

  • Oliver E. Williamson and Sidney G. Winter, eds., The Nature of the Firm. New York: Oxford University Press, 1991 (paperback). This is a collection of essays to commemorate the fiftieth anniversary of the publication of Coase's 1937 article (listed below). Readings from this book are denoted W&W in what follows
  • Oliver E. Williamson, The Economic Institutions of Capitalism. New York: The Free Press, 1985 (paperback).
  • Richard R. Nelson and Sidney G. Winter, An Evolutionary Theory of Economic Change. Cambridge: the Belknap Press, 1982 (paperback).
  • Richard N. Langlois and Paul L. Robertson, Firms, Markets, and Economic Change: A Dynamic Theory of Business Institutions (London: Routledge, 1995, paperback).

I have placed some of the material (as noted below) on reserve in the library. I have not placed on reserve articles from easily obtainable journals, as these are always effectively on reserve in the third-floor stacks. Please be courteous and reshelve journals after reading or copying them: it takes days for the library to get around to reshelving.

Many articles available on the web are in Adobe Acrobat (PDF) format. To read them, you will need the Adobe Acrobat reader. This should already be installed on University microlab computers. But if you don't have it, you can download it for free.

Note also that, for copyright reasons, some links are accessible only from computers connected to the Internet through the UConn domain. If you live off campus and are connecting through a private ISP, check with the computer center about something called a proxy server.

Course requirements.

The grade for the course will be based on six or seven short papers written over the course of the semester. I will assign each paper two weeks before it is due. Each assignment will ask you to write five to ten pages addressing an issue we will cover after the paper's deadline. This will help you - i.e., force you- to keep up with the reading. I will deduct one-third of a grade point (e.g., the difference between a B and a B-) for each day the paper is late, and I will not accept the paper at all once we have begun discussing its topic (as to do otherwise would give advantage to procrastinators). This is not a "W" course, so you will not be graded on style, except to the extent that it is impossible to separate form from content and that lousy writing often implies lack of content.

Sequence of Topics.

The structure of production.

 

Transaction-cost economics: overview.

 

The Coasean approach.

  • Ronald H. Coase, "The Nature of the Firm," Economica (N.S.) 4: 386-405 (November 1937).
  • Ronald H. Coase, "The Nature of the Firm: Origin, Meaning, Influence," Journal of Law, Economics, and Organization 4(1), Spring 1988, reprinted in Oliver E. Williamson and Sidney G. Winter, eds., The Nature of the Firm. New York: Oxford University Press, 1991. (On reserve.)
  • Steven N. S. Cheung, "The Contractual Nature of the Firm," Journal of Law and Economics 26: 122 (April 1983).
  • Carl Dahlman, "The Problem of Externality," Journal of Law and Economics 22: 141-162 (1979).

 

Moral hazard, monitoring, and measurement costs.

 

Asset specificity.

 

Incomplete-contracts theory.

 

Dispersed knowledge and monitoring.

 

Production costs redux: Economic capabilities.

  • Harold Demsetz, The Economics of the Business Firm. New York: Cambridge University Press, 1995, chapters 1 and 2. (On reserve.)
  • Sidney G. Winter, "On Coase, Competence, and the Corporation," Journal of Law, Economics, and Organization 4(1): 163-180 (Spring 1988) reprinted in Oliver E. Williamson and Sidney G. Winter, eds., The Nature of the Firm. New York: Oxford University Press, 1991. (On reserve.).
  • Richard N. Langlois and Nicolai J. Foss, "Capabilities and Governance: the Rebirth of Production in the Theory of Economic Organization," Kyklos 52(2): 201-218 (1999).
  • David J. Teece, Gary Pisano, and Amy Shuen, "Dynamic Capabilities and Strategic Management," Strategic Management Journal 18(7): 509-533 (August 1997).
  • Nelson and Winter, Evolutionary Theory, chapters 4 and 5.
  • Edith Penrose, The Theory of the Growth of the Firm. Oxford: Basil Blackwell, 1959 [Third edition, 1995.] (On reserve.)
  • G. B. Richardson, "The Organisation of Industry," Economic Journal 82(327): 883-896 (1972).
  • David J. Teece, "Economies of Scope and the Scope of the Enterprise," Journal of Economic Behavior and Organization 1(3): 223 (1980). (On reserve.)
  • David J. Teece, "Towards an Economic Theory of the Multiproduct Firm," Journal of Economic Behavior and Organization 3: 39-63 (1982), reprinted in Louis Putterman and Randall Kroszner, eds., The Economic Nature of the Firm: A Reader. New York: Cambridge University Press. (Both first and second eeditions on reserve.)
  • David J. Teece, "Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing, and Public Policy," Research Policy 15: 285-305 (December 1986).
  • C. K. Prahalad and Gary Hamel, "The Core Competence of the Corporation," Harvard Business Review, May-June 1990, pp. 7991.

 

Evolutionary theory.

  • Armen Alchian, "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy 58(3): 211-221 (1950).
  • Richard R. Nelson and Sidney G. Winter, An Evolutionary Theory of Economic Change. Cambridge: the Belknap Press, 1982, especially chapters 1, 2, 12, 13, 14, and 15.

 

Organization and economic change.

 

Modular systems.

 

The old economy and the new economy.

 


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