Academic journal article NBER Reporter

Organizational Economics

Academic journal article NBER Reporter

Organizational Economics

Article excerpt

The NBER's Working Group on Organizational Economics, directed by NBER Research Associate Robert S. Gibbons of MIT, held its third annual meeting on November 5-6. The papers presented covered many of the working group's major themes, illustrating the broad range of topics within the emerging field of organizational economics. All of these themes and topics share a common focus on "governed transactions" (that is, transactions that do not occur in frictionless markets). Naturally, the group's main focus is on transactions within firms. As a result, many of the group's members are drawn from the relevant margins of other NBER Programs and Working Groups that study resource allocation and other processes within firms, such as Corporate Finance, Personnel Economics, and Productivity. The papers delivered by Scharfstein, Benabou, Schmidt, Shaw, Oyer, Klein, Gibbons, and Winter addressed these kinds of issues.

The group is also pursuing a significant interest in governed transactions between firms, such as contracts, "hybrid" governance structures (that is, alliances, joint ventures, and networks), and activities that change firms' boundaries (that is, start-ups, spin-offs, and mergers). As a result, some of the group's members are drawn from the relevant margins of NBER Programs and Working Groups such as Entrepreneurship, Industrial Organization, and International Trade and Organization. The papers delivered by Hart, Perotti, Bidwell, Azoulay, and Garicano addressed these kinds of issues.

Finally, many of the principles that apply to governed transactions within and between firms also apply to other kinds of organizations and institutions, so the group is also pursuing a subsidiary interest in organizations such as schools, hospitals, government agencies, and beyond. The papers delivered by Khwaja and Tadelis addressed these kinds of issues.

The meeting program was:

David S. Scharfstein, NBER and Harvard University, and Ilan Guedj, MIT, "Organizational Scope and Investment: Evidence from the Drug Development Strategies of Biopharmaceutical Firms" Asim Khwaja, Harvard University, and Atif Mian, University of Chicago, "Do Lenders Favor Politically Connected Firms? Rent-seeking in an Emerging Financial Market" Discussant: Antoinette Schoar, NBER and MIT

Roland Benabou, NBER and Princeton University, and Jean Tirole, University of Toulouse, "Incentives and Prosocial Behavior" Alexander Klein and Klaus Schmidt, University of Munich, and Ernst Fehr, University of Zurich, "Contracts, Fairness, and Incentives" Discussant: W. Bentley Macleod, University of Southern California

Ben Klein, University of California, Los Angeles, "When Does a Contractual Adjustment Involve a Holdup? The Dynamics of Fisher Body-General Motors" Robert Gibbons, "A Rent-seeking Theory of the Firm?" Discussant: Scott Masten, University of Michigan

Kathryn L. Shaw, NBER and Stanford University, and Ann P. Bartel and Casey Ichniowski, NBER and Columbia University, "The Strategic Investment in Information Technologies and New Human Resource Practices and Their Effects on Productivity: An Insider Econometric Analysis" Paul Oyer, NBER and Stanford University, "Salary or Benefits?" Discussant: George Baker, NBER and Harvard University

Oliver D. Hart, NBER and Harvard University, and John Moore, London School of Economics, "Agreeing Now to Agree Later: Contracts that Rule Out but do not Rule In" Enrico Perroti, University of Amsterdam, and Thomas Hellmann, University of British Columbia, "The Circulation of Ideas: Firms versus Markets" Discussant: Daron Acemoglu, NBER and MIT

Matthew Bidwell, INSEAD Singapore, "What Do Firms Do Differently? Comparing the Governance of Internal and Outsourced IT Projects" Pierre Azoulay, NBER and Columbia University, "Agents of Embeddedness" Discussant: Francine LaFontaine, University of Michigan

Sidney Winter, University of Pennsylvania, "Towards an Evolutionary Theory of Production" Discussant: Bengt R. …

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