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Economics department
 What follows is my best guess as to what we'll cover during the semester. Expect periodic updates and revisions. Required readings are preceded by an asterisk (*); recommended supplementary or background readings are preceded by a dagger (†). Other items are included for bibliographic completeness. 

You'll notice that the first part of the course contains mostly theory papers, while the second half contains mostly empirical papers. A major goal of the course is to provide you with dissertation ideas. Most of you will write empirical dissertations, so consider these empirical papers examples for you to follow. All made important substantive contributions, all were published in good journals, and none uses particularly difficult econometric techniques. 

For copyright reasons, some of the online articles are accessible only from workstations within the "uga.edu" domain.

     
  1. Introduction: firms, contracts, and institutions

    2. * Peter G. Klein, "New Institutional Economics," in Boudewijn Bouckeart and Gerrit De Geest, eds., Encyclopedia of Law and Economics (Aldershott, U.K.: Edward Elgar, and Ghent, Belgium: the University of Ghent, 2000), pp. 456-89.

    * Oliver E. Williamson, "Introduction," to Williamson, 1990.

    * Scott E. Masten, "Introduction," in Masten, 1996.

    * Oliver E. Williamson, "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature 38, no. 3 (September 2000): 595-613.

    * Ronald H. Coase, "The Nature of the Firm," Economica (N.S.) 4 (1937): 386-405. Chapter 1 in Williamson, 1990.

    * Armen A. Alchian, "Uncertainty, Evolution, and Economic Theory," Journal of Political Economy 58 (June 1950): 211-21. Chapter 2 of Williamson, 1990.

    † David Kreps, A Course in Microeconomic Theory (Princeton, N.J.: Princeton University Press, 1990), chapter 19.

    † Journal of Economic Perspectives symposium on "The Firm and Its Boundaries," Fall 1998 (articles by Holmstrφm and Roberts, Bolton and Scharfstein, Gibbons, and Shleifer).

    American Economic Review, Papers and Proceedings, May 2001, sessions on "The Scope of the Firm: New Empirical Directions" (papers by Whinston, Baker and Hubbard, and Mullainathan and Scharfstein) and "Organizational Economics" (papers by Athey and Roberts, Rajan and Zingales, and Baker, Gibbons, and Murphy).

    Herbert A. Simon, "The Architecture of Complexity," Proceedings of the American Philosophical Society 106 (December 1962): 467-82. Chapter 7 in Williamson, 1990.

    Ronald H. Coase, "The Institutional Structure of Production," American Economic Review 82, no. 4 (September 1992): 713-19.

    Lance E. Davis and Douglass C. North, Institutional Change and American Economic Growth (Cambridge: Cambridge University Press, 1971), pp. 3-25.

     

  2. Strategic behavior
      3.  
    1. Basic concepts: games, strategies, and equilibrium; cooperation and the evolution of norms

      2. * Mas-Colell et al., chapters 7-9, 13.

      * Robert C. Ellickson, "A Hypothesis of Wealth-Maximizing Norms: Evidence From the Whaling Industry," Journal of Law, Economics and Organization 5, no. 1 (Spring 1989): 82-97. Chapter 1 of Masten, 1996.

      † Gibbons.

      David Kreps, Game Theory and Economic Modelling (Oxford: Clarendon Press, 1990). [Interesting reflections, insights]

      Robert J. Aumann, "Game Theory," in John Eatwell, Murray Milgate, and Peter Newman, eds., Game Theory (New York: Macmillan, 1989), pp. 1-53 [excerpted from the New Palgrave]. [A useful survey] 

      Paul Milgrom, "Auctions and Bidding: A Primer," Journal of Economic Perspectives 3, no. 3 (Summer 1989): 3-22. [Quick introduction to auction theory, a bit dated. See also the other articles in the same issue of JEP.] 

      Paul Klemperer, "Auction Theory: A Guide to the Literature," Journal of Economic Surveys 13, no. 3 (July 1999): 227-86. [Thorough, non-technical survey.]

      Joanna Glasner, "How Spectrum Sales Turned Sour,", Wired, March 5, 2002.

       

    2. Oligopoly

      3. * Mas-Colell et al., chapter 12.

      † Gibbons.

      * Paul Milgrom and John Roberts, "Limit Pricing and Entry Under Incomplete Information: An Equilibrium Analysis," Econometrica 50, no. 2 (March 1982): 443-59. Chapter 19 in Williamson, 1990.

      David Kreps and Robert Wilson, "Reputation and Imperfect Information," Journal of Economic Theory 27 (August 1982): 245-52. Chapter 20 in Williamson, 1990.

      * Drew Fudenberg and Jean Tirole, "The Fat-Cat Effect, The Puppy-Dog Ploy, and the Lean and Hungry Look," American Economic Review 74 (May 1984): 361-66. Chapter 21 in Williamson, 1990.

      † William Baumol, John Panzar, and Robert A. Willig, "On the Theory of Perfectly Contestable Markets," in Joseph E. Stiglitz, ed., New Developments in the Analysis of Market Structure (Cambridge, Mass.: MIT Press, 1986), pp. 339-65. Chapter 22 in Williamson.

      Carl Shapiro, "Theories of Oligopoly Behavior," in Richard Schmalensee and Robert Willig, eds., Handbook of Industrial Organization (Amsterdam: North-Holland, 1989).

      † Sam Peltzman, "The Handbook of Industrial Organization: A Review Article," Journal of Political Economy 99, no. 1 (1991): 201-17.

      Richard Schmalensee, "Do Markets Differ Much?" American Economic Review 75, no. 3 (June 1985): 341-51.

     

  3. Agency theory and mechanism design

    4. * Mas-Colell et al., chapters 14 and 23.

    * Armen A. Alchian and Harold Demsetz, "Production, Information Costs, and Economic Organization," American Economic Review 62 (December 1972): 777-95.

    * Michael Jensen and William Meckling, "Theory of the Firm: Managerial Behavior, Agency Costs, and Capital Structure," Journal of Financial Economics 3 (October 1976): 305-60.

    † David Sappington, "Incentives in Principal-Agent Relationships," Journal of Economic Perspectives 5 (Spring 1991): 45-66.

    † Joseph Stiglitz, "Principal and Agent," in John Eatwell, Murray Milgate, and Peter Newman, eds., Allocation, Information and Markets (New York: Macmillan, 1989), pp. 241-53. 

    Michael C. Jensen and Kevin J. Murphy, "Performance Pay and Top-Management Incentives," Journal of Political Economy 98, no. 2 (April 1990): 225-64. 

    Brian J. Hall and Jeffrey B. Liebman, "Are CEOs Really Paid Like Bureaucrats?" Quarterly Journal of Economics 113, no. 3 (August 1998): 653-91. 

    Ravi Jagannathan and Shaker Srinivasan, "Does Product-Market Competition Reduce Agency Costs?" NBER Working Paper w7480, January 2000.

    Bengt Hölmstrom, "Moral Hazard in Teams" [1982], in Williamson, chapter 9.

     

  4. Transaction cost economics
      5.  
    1. General

      2. * Oliver E. Williamson, "Transaction Cost Economics: The Governance of Contractual Relations," Journal of Law and Economics 22 (October 1979): 233-61. Chapter 12 in Williamson, 1990.

      * Benjamin Klein, Robert A. Crawford, and Armen A. Alchian, "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics 21 (1978): 297-326.

      † Kreps, A Course in Microeconomic Theory, pp.743-56.

      † Howard A. Shelanski and Peter G. Klein, "Empirical Research in Transaction Cost Economics: A Review and Assessment," Journal of Law, Economics and Organization 11, no. 2 (October 1995): 335-61.

      Christopher Boerner and Jeffrey Macher, "Transaction Cost Economics: An Assessment of Empirical Research in the Social Sciences," working paper, Georgetown University, 2001.

      Paul Milgrom and John Roberts, Economics, Organization, and Management (Englewood Cliffs, N.J.: Prentice-Hall, 1992), pp. 28-35, 126-140.

      Oliver E. Williamson, The Economic Institutions of Capitalism (New York: Free Press, 1985).

      Oliver E. Williamson, The Mechanisms of Governance (New York: Oxford University Press, 1996).

       

    2. Vertical integration

      3. * Kirk Monteverde and David J. Teece, "Supplier Switching Costs and Vertical Integration in the Automobile Industry," Bell Journal of Economics 13, no. 1 (Spring 1982): 206-13. Chapter 9 of Masten, 1996.  

      * Scott E. Masten, "The Organization of Production: Evidence from the Aerospace Industry," Journal of Law and Economics 27 (October 1984): 403-17. Chapter 10 of Masten, 1996.  

      * John Vickers, "Competition and Regulation in Vertically Related Markets," Review of Economic Studies 62 (1995): 1-17 [presented by Siew Hoon Lim].

      * David Levy, "The Transaction Cost Approach to Vertical Integration: An Empirical Examination," Review of Economics and Statistics 67 (1985): 438-45 [presented by Leo Hwang].

      † Benjamin Klein, "Vertical Integration as Organized Ownership: The Fisher Body-General Motors Relationship Revisited," Journal of Law, Economics and Organization 4, no. 1 (Spring 1988): 199-213. Chapter 8 of Masten, 1996.  

      Martin K. Perry, "Vertical Integration: Determinants and Effects," in Schmalensee and Willig, eds., Handbook of Industrial Organization, pp. 183-255, esp. pp. 212-20.

      John Stuckey, Vertical Integration and Joint Ventures in the Aluminum Industry (Cambridge, Mass.: Harvard University Press, 1983).

      Paul L. Joskow, "Vertical Integration and Long Term Contracts: The Case of Coal-Burning Electric Generating Plants," Journal of Law, Economics & Organization 1 (1985): 33-80.  

       

    3. Long-term contracts

      4. * Scott E. Masten and Keith J. Crocker, "Efficient Adaptation in Long-Term Contracts: Take-or-Pay Provisions for Natural Gas," American Economic Review 75, no. 5 (December 1985): 1083-93. Chapter 5 of Masten, 1996.  

      * Paul L. Joskow, "Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets," American Economic Review 77 (March 1987): 168-85. Chapter 6 in Masten, 1996.

      Victor Goldberg and John R. Erickson, "Quantity and Price Adjustment in Long-Term Contracts: A Case Study of Petroleum Coke," Journal of Law and Economics 30 (Octobert 1987): 369-98. Chapter 4 in Masten, 1996.

      Scott E. Masten and Stephane Saussier, "Econometrics of Contracts: An Assessment of Developments in the Empirical Literature on Contracting," working paper, University of Michigan Business School, 2000.

       

    4. Enforcement: reputations and hostages

      5. Benjamin Klein and Keith B. Leffler, "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy 89, no. 4 (1981): 615-41. Chapter 15 of Williamson, 1990.  

      Oliver E. Williamson, "Credible Commitments: Using Hostages to Support Exchanges," American Economic Review 73, no. 4 (1983): 519-40.

      David Kreps, "Corporate Culture and Economic Theory," in James E. Alt and Kenneth A. Shepsle, eds., Perspectives on Positive Political Economy (Cambridge: Cambridge University Press, 1990).

       

    5. Regulation

      6. * Oliver E. Williamson, "Franchise Budding for Natural Monopolies -- in General and With Respect to CATV," Bell Journal of Economics 7, no. 1 (1976): 73-104.  

      William P. Rogerson, "Profit Regulation for Defense Contractors and Prizes for Innovation," Journal of Political Economy 97, no. 6 (1989): 1284-1305.

      Victor Goldberg, "Regulation and Administered Contracts," Bell Journal of Economics 7, no. 3 (1976): 426-48.

       

    6. Hybrids: franchising, leasing, and exclusive dealing

      7. Patrick J. Kaufmann and Francine Lafontaine, "Costs of Control: The Source of Economic Rents for McDonald's Franchisees," Journal of Law and Economics 37 (October 1994): 417-53. Chapter 14 in Masten.  

      Scott E. Masten and Edward A. Snyder, "United States v. United Shoe Machinery Corporation: On the Merits," Journal of Law and Economics 36 (April 1993): 33-70. Chapter 12 in Masten, 1996.

      Edward C. Gallick, "Exclusive Dealing and Vertical Integration: The Efficiency of Contracts in the Tuna Industry," chapters 1 and 2 of Exclusive Dealing and Vertical Integration: The Efficiency of Contracts in the Tuna Industry, Federal Trade Commission, Bureau of Economics, Staff Report (August 1984). Chapter 11 in Masten.

     

  5. The Property Rights Approach

    6. * Sanford J. Grossman and Oliver D. Hart, "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy 94, no. 4 (1986): 691-719. Chapter 13 of Williamson, 1990 [presented by Syed Hussain].

    † Kreps, A Course in Microeconomic Theory, pp.756-69.

    Oliver D. Hart and John Moore, "Property Rights and the Nature of the Firm," Journal of Political Economy 98 (1990): 1119-58.

    Jean Tirole, "Incomplete Contracts: Where Do We Stand?, Econometrica 67, no. 4 (1999): 741-81.

    David Kreps, "Markets and Hierarchies and (Mathematical) Economic Theory," Industrial and Corporate Change 5 (1996): 561-96.

    Review of Economic Studies 66, no. 1 (special issue), articles by Hart and Moore and Maskin and Tirole.

    Oliver D. Hart, Firms, Contracts, and Financial Structure (Oxford: Clarendon Press, 1995), chapter 2.

    Nicolai J. Foss and Kirsten Foss, "Assets, Attributes and Ownership," International Journal of the Economics of Business 8 (2001): 19-37.

     

  6. Miscellaneous
      7.  
    1. Innovation

      2. Steven N. Wiggins, "Organizational Form, Contracting, and Innovation," working paper, Department of Economics, Texas A&M University, April 1994.

      Peter G. Klein, "Are Internal Capital Markets Good for Innovation?" working paper, University of Georgia, 2001.

       

    2. Macroeconomics

      3. * Ricardo J. Caballero and Mohammad L. Hammour, "The Macroeconomics of Specificity," Journal of Political Economy 106, no. 4 (August 1998): 724-67 [presented by Danny Hughes].

      Henri L. F. De Groot, "Macroeconomic Consequences of Outsourcing," CentER Working Paper 9843, April 1998. 

       

    3. Bureaucracy

      4. * Robert E. McCormick and Roger E. Meiners, "University Governance: A Property Rights Perspective," Journal of Law and Economics 31, no. 2 (October 1998): 423-42 [presented by Joe Calhoun].

      Terry Moe, "The Politics of Structural Choice: Toward a Theory of Public Bureaucracy," in Oliver E. Williamson, ed., Organization Theory (New York: Oxford University Press, 1990), pp. 116-53.  

       

    4. Finanical institutions

      5. Peter G. Klein and Marc R. Saidenberg, "Diversification, Organization, and Efficiency: Evidence from Bank Holding Companies," in Patrick T. Harker and Stavros A. Zenios, eds., Performance of Financial Institutions: Efficiency, Innovation, Regulation (Cambridge: Cambridge University Press, 2000), pp. 153-73.

      Douglas W. Diamond and Philip H. Dybvig, "Bank Runs, Deposit Insurance, and Liquidity," Journal of Political Economy 91, no. 3, (June 1983): 401-19. 

      Postlewaite, Andrew and Xavier Vives, "Bank Runs as an Equilibrium Phenomenon", Journal of Political Economy 95 no.3 (June 1987): 485-91.  

       

    5. Corporate governance

      6. * Anup Agrawal and Charles R. Knoeber, "Do Some Outside Directors Play a Political Role?", Journal of Law and Economics 44, no. 1 (April 2001): 179-98 [presented by Darrin Gulla].

      Andrei Shleifer Robert W. Vishny, "A Survey of Corporate Governance," Journal of Finance 52, no. 2 (June 1997): 737-83.  

      Bernard S. Black and Ronald J. Gilson, "Venture Capital and the Structure of Capital Markets: Banks versus Stock Markets," Journal of Financial Economics 47, no. 3 (March 1998): 243-77.  

      Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer, "Corporate Ownership Around the World," working paper, Department of Economics, Harvard University, 1998.  

      Donald H. Chew, ed., The New Corporate Finance: Where Theory Meets Practice, second edition (Boston: Irwin, 1999).

       

    6. Strategy 

      7. Daniel F. Spulber, "Economic Analysis and Management Strategy: A Survey," Journal of Economics and Management Strategy 1, no. 3 (Fall 1992): 535-74.  

       

    7. Marketing

      8. Erin Anderson and David. C. Schmittlein,"Integration of the Sales Force: An Empirical Examination," Rand Journal of Economics 15 (1984): 385-95.

      Timothy J. Muris, David Scheffman, and Pablo T. Spiller, "Strategy and Transaction Costs: The Organization of Distribution in the Carbonated Soft Drink Industry," Journal of Economics and Management Strategy 1 (1992): 83-128. Chapter 13 of Masten, 1996. 

       

    8. Law 

      9. Douglas G. Baird, Robert H. Gertner, and Randal C. Picker, Game Theory and the Law (Cambridge, Mass.: Harvard University Press, 1994). 

       

    9. Economic history

      10. Margaret C. Levenstein, "Do Price Wars Facilitate Collusion? A Study of the Bromine Cartel before World War I," Explorations in Economic History 33 (January 1996): 107-37.

       

    10. Austrian and evolutionary perspectives

      David B. Audretsch, William J. Baumol and Andrew E. Burke, "Competition policy in dynamic markets," International Journal of Industrial Organization 19, no. 5 (April 2001): 613-34.

      Louis Makowiski and Joseph Ostroy, "Perfect Competition and the Creativity of the Market," Journal of Economic Literature 39 (June 2001): 479-535.

      Richard N. Langlois, "Transaction-Cost Economics in Real Time," Industrial and Corporate Change 1, no. 1 (1992): 99-127.

      Peter G. Klein and Nicolai J. Foss, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Aldershott, U.K.: Edward Elgar, 2002).


  7. Critiques

    8. Geoffrey Hodgson, "Institutional Economics: Surveying the 'Old' and 'New'", Metroeconomica 44, no. 1 (February 1993).

    Posner-Coase-Williamson exchange in Journal of Institutional and Theoretical Economics 149, no. 1 (March 1993): 73-121.

    Roderick Martin, "The New Behaviorism: A Critique of Economics and Organization," Human Relations 46, no. 9 (September 1993): 1085-1101. 

    Richard N. Langlois, "What Was Wrong with the Old Institutional Economics (and What is Still Wrong with the New)?" Review of Political Economy 1, no. 3 (November 1989).

    Samuel Bowles and Herbert Gintis, "The Revenge of Homo Economicus: Contested Exchange and the Revival of Political Economy," with comments by Oliver E. Williamson and Joseph E. Stiglitz, Journal of Economic Perspectives 7, no. 1 (Winter 1993): 83-114.

     

  8. Useful surveys

    9. Eirik G. Furubotn and Rudolf Richter, Institutions and Economic Theory: The Contribution of the New Institutional Economics (Ann Arbor: University of Michigan Press, 1997). 

    Oliver E. Williamson, "Transaction Cost Economics," in Richard Schmalensee and Robert Willig, eds., Handbook of Industrial Organization, pp. 135-82.

    Howard A. Shelanski and Peter G. Klein, "Empirical Research in Transaction Cost Economics: A Review and Assessment," Journal of Law, Economics and Organization 11, no. 2 (October 1995): 335-61.

    Michael C. Jensen, Foundations of Organizational Strategy (Cambridge, Mass.: Harvard University Press, 1998). A collection of Jensen's most famous articles, including the one with Meckling above.

    Steven Wiggins, "The New Economics of the Firm and Contracts: A Selective Survey," Journal of Institutional and Theoretical Economics 147 (1991): 603-61. 

    Scott E. Masten, "Contractual Choice," in Boudewijn Bouckeart and Gerrit De Geest, eds., Encyclopedia of Law and Economics (Aldershott, U.K.: Edward Elgar, and Ghent, Belgium: the University of Ghent, forthcoming). 

    Hart, Firms, Contracts, and Financial Structure.

    Canice Prendergast, "The Provision of Incentives in Firms," Journal of Economic Literature 37, no. 1 (March 1999): 7-63. 

    Recent symposium issues of Journal of Institutional and Theoretical Economics.