Economics of Organizations: economics of property rights and transaction cost economics

Discipline: EAD5704-8

Concentration area: 12139

Number of Credits: 8

Course load:

(Per week)
(Per week)
(Per week)
With its focus directed to transaction cost economics and property rights this course is rooted in the contributions of Ronald Coase and Oliver Williamson, considered the forefathers of the field of New Institutional Economics. The concepts covered are useful for scientists of organizations (administration and business), economics, law, and other areas of applied social sciences
The course is designed to cover topics as; the theories of the firm, vertical integration, networks, property rights, economics of contracts, mechanisms of governance, among other items. The course is deeply connected to the other courses thought in the area of Economics of Organizations and the concepts covered are useful for other areas as, finances, marketing, and strategy.
REQUIREMENTS: We expect that the students are familiar with the principles of microeconomic theory, statistical analysis in a level coherent with the requirements of the graduate program in Administration.


Part I – Foundations (sessions 1 to 6)
The nature of contractual firm and allocation of property rights are to be discussed based in the seminal contribution of Roanld Coase.
Sessions 1 and 2: The Nature of the Firm: the contribution of Ronald Coase.
Sessions 3 and 4: Institutions and Economics of Organizations.
Sessions 4 and 5: Institutions and Property Rights.
Session 6: Contracts and Organizations.

Part II – Transaction Cost Economics (sessions 7 a 11)
The concept and applications of transaction cost economics will be discussed, including the critics and alternative views, based in the work of Oliver Williamson and Yoram Barzel.
Sessions 7 to 11: Transaction Cost Economics.

Part III – Aplications: (sessions 12 to 15)
Sessions 12 and 13: The contribution of Elinor Ostron will be covered with discussions related with resources sustainability and environment.

Session 14: Law, Economics and Organizations

Session 15: Final evaluation, wrap-up, feedback from students.

Avaliation methods:
GRADES: Grading is based in two activities: first a term paper produced by the student, with the main objective to frame a research topic and plan a possible em

TEACHING METHOD: The students are expected to read in advance the papers suggested for each session. I will make a bried discussion of the concepts at the beginning of the classes, followed by discussions in small groups and plenary discussions. Students are expected to be familiar with the main international journals dedicated to the topics.

A standard session is planned to have four parts:
a) Brief motivation about the topic to be covered.
b) Plenary Debate I.
c) Group discussion about selected papers.
d) Plenary Debate II.
Previous readings of selected papers are required and students are expected to have a pro-active role during the discussion sessions. The Reading lists will be delivered two weeks in advance. OBS: The Reading list for sessions I and II will be available for download by July 15th.

Relevant Books:
Oliver Williamson. The Economic Institutions of Capitalism. Free Press. 1985.
Oliver Williamson. The MEchanisms of Governance. Oxford Press. 1996
Oliver Williaonson. The Transaction Cost Economics Project. Elgar. 2013.
Ronald Coase. The Firm, the market and the law. CHicago.1988.

Specific papers will be informed timely.