Organizational economics

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Organizational economics (also referred to as economics of organization) involves the use of economic logic and methods to understand the existence, nature, design, and performance of organizations, especially managed ones.

Economics Social science that analyzes the production, distribution, and consumption of goods and services

Economics is the social science that studies the production, distribution, and consumption of goods and services.

Management Coordinating the efforts of people

Management is the administration of an organization, whether it is a business, a not-for-profit organization, or government body. Management includes the activities of setting the strategy of an organization and coordinating the efforts of its employees to accomplish its objectives through the application of available resources, such as financial, natural, technological, and human resources. The term "management" may also refer to those people who manage an organization.

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:

In economics and related disciplines, a transaction cost is a cost in making any economic trade when participating in a market.

Principal–agent problem Agency Problem

The principal–agent problem, in political science and economics occurs when one person or entity, is able to make decisions and/or take actions on behalf of, or that impact, another person or entity: the "principal". This dilemma exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals, and is an example of moral hazard.

In economics, contract theory studies how economic actors can and do construct contractual arrangements, generally in the presence of asymmetric information. Because of its connections with both agency and incentives, contract theory is often categorized within a field known as Law and economics. One prominent application of it is the design of optimal schemes of managerial compensation. In the field of economics, the first formal treatment of this topic was given by Kenneth Arrow in the 1960s. In 2016, Oliver Hart and Bengt R. Holmström both received the Nobel Memorial Prize in Economic Sciences for their work on contract theory, covering many topics from CEO pay to privatizations.

Notable theorists and contributors in the field of organizational economics: [1] [2] [3]

Kenneth Arrow American economist

Kenneth Joseph "Ken" Arrow 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.

Herbert A. Simon American political scientist, economist, sociologist, and psychologist

Herbert Alexander Simon was an American economist, political scientist and cognitive psychologist, whose primary research interest was decision-making within organizations and is best known for the theories of "bounded rationality" and "satisficing". He received the Nobel Prize in Economics in 1978 and the Turing Award in 1975. His research was noted for its interdisciplinary nature and spanned across the fields of cognitive science, computer science, public administration, management, and political science. He was at Carnegie Mellon University for most of his career, from 1949 to 2001.

Ronald Coase British economist and author

Ronald Harry Coase was a British economist and author. He was the Clifton R. Musser Professor of Economics at the University of Chicago Law School, where he arrived in 1964 and remained for the rest of his life. He received the Nobel Memorial Prize in Economic Sciences in 1991.

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William Vickrey Canadian noble laureate in economics

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Economist professional in the social science discipline of economics

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Robert Emerson Lucas Jr. is an American economist at the University of Chicago, where he is currently the John Dewey Distinguished Service Professor Emeritus in Economics and the College. Widely regarded as the central figure in the development of the new classical approach to macroeconomics, he received the Nobel Prize in Economics in 1995 "for having developed and applied the hypothesis of rational expectations, and thereby having transformed macroeconomic analysis and deepened our understanding of economic policy". He has been characterized by N. Gregory Mankiw as "the most influential macroeconomist of the last quarter of the 20th century."

Oliver E. Williamson American economist

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Robert Solow American economist

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Cliometrics

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Paul Milgrom American economist

Paul Robert Milgrom is an American economist. He is the Shirley and Leonard Ely Professor of Humanities and Sciences at Stanford University, a position he has held since 1987. Milgrom is an expert in game theory, specifically auction theory and pricing strategies. He is the co-creator of the no-trade theorem with Nancy Stokey. He is the co-founder of several companies, the most recent of which, Auctionomics, provides software and services that create efficient markets for complex commercial auctions and exchanges.

The theory of the firm consists of a number of economic theories that explain and predict the nature of the firm, company, or corporation, including its existence, behaviour, structure, and relationship to the market.

Information economics or the economics of information is a branch of microeconomic theory that studies how information and information systems affect an economy and economic decisions. Information has special characteristics: It is easy to create but hard to trust. It is easy to spread but hard to control. It influences many decisions. These special characteristics complicate many standard economic theories.

Dale T. Mortensen American economist

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Omicron Delta Epsilon

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Karl Shell is an American theoretical economist, specializing in macroeconomics and monetary economics.

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Oliver Simon D'Arcy Hart is a British-born American economist, currently the Andrew E. Furer Professor of Economics at Harvard University. Together with Bengt R. Holmström, he received the Nobel Memorial Prize in Economic Sciences in 2016.

New institutional economics (NIE) is an economic perspective that attempts to extend economics by focusing on the social and legal norms and rules that underlie economic activity and with analysis beyond earlier institutional economics and neoclassical economics. It can be seen as a broadening step to include aspects excluded in neoclassical economics. It rediscovers aspects of classical political economy.

Christopher A. Sims American time-series statistician and econometrician, developer of vector auto-regressive models, Bayesian statistician, President of the Econometric Society, 2011 winner of the Nobel Prize

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