14.282 | Spring 2009 | Graduate

Organizational Economics


Course Meeting Times

Lectures: 2 sessions / week, 1.5 hours / session


This course in organizational economics prepares doctoral students for further study in the field. The course introduces the classic papers and some recent research. The material is organized into the following modules:

  • Module 1: Boundaries of the firm
  • Module 2: Employment in organizations
  • Module 3: Decision-making in organizations
  • Module 4: Structures and processes in organizations

Each class session covers a few leading papers.

This course was joint-taught between faculty of the Massachusetts Institute of Technology and Harvard University. The Harvard course is Economics 2670 Organizational Economics.


The prerequisites are first-year graduate microeconomics (Economics 2010a Economic Theory and 2010b Economic Theory at Harvard or the 14.121-14.124 Microeconomic Theory I-IV sequence at MIT). In addition students should be familiar and comfortable with the material on incentives and control discussed in the following readings:

Gibbons, Robert. “Incentives Between Firms (and Within).” Management Science 51 (2005): 2-17 (sections 2-4).

———. “Four Formal(izable) Theories of the Firm?” Journal of Economic Behavior and Organization 58 (2005): 202-247 (section 2).


There are three deliverables for credit in the course. The first is a set of three short model-development essays , corresponding to the class sessions devoted to discussing case studies (Ses #7, #9, and #20). There are also cases (marked by “C”) in some other class sessions; one such case can be the basis for one model-development essay.

In addition to the model-development essays, there are two other requirements: a review essay on one of the draft chapters of The Handbook of Organizational Economics (marked by “H”) and a final paper on any topic of interest to you relating to the material in the course.


Model-development essays (3) 1/3
Handbook-review paper 1/6
Final paper 1/2

Course Info

As Taught In
Spring 2009