organizational economics
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Organizational economics (also referred to as ''economics of organization'') involves the use of
economic An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with th ...
logic and methods to understand the existence, nature, design, and performance of
organizations An organization or organisation (Commonwealth English; see spelling differences), is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose. The word is derived from ...
, especially managed ones. Organizational economics is primarily concerned with the obstacles to coordination of activities inside and between organizations (firms, alliances, institutions, and market as a whole). Organizational economics is known for its contribution to and its use of: * Transaction cost theory: costs incurred to organize an activity, especially regarding research of information, bureaucracy, communication etc. * Agency theory: dilemmas connected to making decisions on behalf of, or that impact, another person or entity. *
Contract theory From a legal point of view, a contract is an institutional arrangement for the way in which resources flow, which defines the various relationships between the parties to a transaction or limits the rights and obligations of the parties. From an ...
: ways economic actors use to construct contractual arrangements, generally in the presence of
asymmetric information In contract theory and economics, information asymmetry deals with the study of decisions in transactions where one party has more or better information than the other. Information asymmetry creates an imbalance of power in transactions, which can ...
. Notable theorists and contributors in the field of organizational economics: *
Kenneth Arrow Kenneth Joseph Arrow (23 August 1921 – 21 February 2017) was an American economist, mathematician, writer, and political theorist. He was the joint winner of the Nobel Memorial Prize in Economic Sciences with John Hicks in 1972. In economi ...
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James March James Gardner March (January 15, 1928 – September 27, 2018) was an American political scientist, sociologist, and economist. A professor at Stanford University in the Stanford Graduate School of Business and Stanford Graduate School of Educ ...
* Herbert Simon *
Oliver Williamson Oliver Eaton Williamson (September 27, 1932 – May 21, 2020) was an American economist, a professor at the University of California, Berkeley, and recipient of the 2009 Nobel Memorial Prize in Economic Sciences, which he shared with Elinor Ost ...
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Ronald Coase Ronald Harry Coase (; 29 December 1910 – 2 September 2013) was a British economist and author. Coase received a bachelor of commerce degree (1932) and a PhD from the London School of Economics, where he was a member of the faculty until 1951. ...
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Bengt Holmström Bengt Robert Holmström (born 18 April 1949) is a Finnish economist who is currently Paul A. Samuelson Professor of Economics (Emeritus) at the Massachusetts Institute of Technology. Together with Oliver Hart, he received the Central Bank of S ...
* Oliver Hart *
Jean Tirole Jean Tirole (born 9 August 1953) is a French professor of economics at Toulouse 1 Capitole University. He focuses on industrial organization, game theory, banking and finance, and economics and psychology. In 2014 he was awarded the Nobel Memor ...
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Joseph Stiglitz Joseph Eugene Stiglitz (; born February 9, 1943) is an American New Keynesian economist, a public policy analyst, and a full professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the J ...


References

Market trends Subfields of economics {{Econ-stub