MG524      One Unit
The Economics of Organisations and Institutions

This information is for the 2025/26 session.

Course Convenor

Availability

Requisites

Additional requisites:

First year courses in the MRes PhD in Economics and Management and MRes PhD in Economics or close substitutes upon permission of the course leader.

The course studies from an economics perspective the major organisations and institutions in modern and historical economies. The course is divided into two sections: a core section which covers the main topics in organisations and institutions, and a set of lectures focusing on specific topics at the frontier of organisational economics research.

The core section focuses on the following areas: monetary and social incentives, decision-making in organisations, communication, organisational structures, careers, managers, leading explanations for productivity differences, boundaries of the firm, multinationals and FDI, managerial practices, and relational contracts.

30 hours of seminars in the Winter Term.
30 hours of seminars in the Autumn Term.

This course has a reading week in Week 6 of Autumn and Winter Term.

In its Ethics Code, LSE upholds a commitment to intellectual freedom. This means we will protect the freedom of expression of our students and staff and the right to engage in healthy debate in the classroom.

Students will read and discuss academic articles throughout the course. The appropriate formative assessment will be the weekly discussion and presentation of research articles and academic manuscripts, and feedback during the seminar. Students will be asked to read research articles or manuscripts in advance of each course meeting, to present to their classmates the analysis in those readings, and (along with the faculty) to guide a discussion of the readings and their place in the literature. The analysis and synthesis  of academic articles as ongoing formative assessment will prepare students for the questions in the take-home exam.

• Gibbons, Robert, "Foundations of Organizational Economics," Princeton University Press, forthcoming 2023.
• Gibbons, R. (2010). Inside organizations: Pricing, politics, and path dependence. Annual Review of Economics, 2(1), 337-365.
• Ashraf, N., & Bandiera, O. (2018). Social incentives in organizations. Annual Review of Economics, 10, 439-463.
• Garicano, L., & Rayo, L. (2016). Why organizations fail: Models and cases. Journal of Economic Literature, 54(1), 137-192.
• Macchiavello, R. (2022). Relational contracts and development. Annual Review of Economics, 14, 337-362.

Literature review (100%)

The summative assessment will be a take-home exam in which students will need to exhibit a command of the literature studied in the course. This exam will ask students about the range of papers studied in the course, mixing qualitative questions requiring summaries and syntheses of literatures studied, as well as some more technical questions on the details of the papers' methods (both theoretical and empirical).