Organisational economics

Abstract

Nearly every organisational economist seems to feel compelled to give his or her own definition of the firm as an organisation. So any classification of economic theories of organisation is necessarily a simplification. Economists will probably object to it because they will see greater differences between themselves than an organisation theorist will see between them. Four concerns are set out in this chapter, from which the major economic approaches to, and definitions of, organisation are derived. These are: transaction costs; agency; property rights; and evolution. As theoretical camps they are by no means mutually exclusive. It could be argued, for example, that, implicitly or explicitly, game theory underpins more or less all economic theories of organisation. Nevertheless, these four concerns seem to correspond to schools of thought that are represented by different authors.