Suitable for researchers and students looking to understand this emerging field in economics, this title surveys the major theories, evidence, and methods used in the field. It displays the topics in organizational economics, including the roles of individuals and groups in organizations, organizational structures and processes, and more.

Contributors ix Introduction 1 Robert Gibbons and John Roberts PART I FOUNDATIONS *1 Complementarity in Organizations 11 * Erik Brynjolfsson and Paul Milgrom *2 Economic Theories of Incentives in Organizations 56 * Robert Gibbons and John Roberts *3 Property Rights 100 * Ilya Segal and Michael D.Whinston *4 Transaction Cost Economics 159 * Steven Tadelis and Oliver E.Williamson PART II METHODS *5 Clinical Papers in Organizational Economics 193 * George P. Baker and Ricard Gil *6 Experimental Organizational Economics 213 * Colin F. Camerer and Roberto A.Weber *7 Insider Econometrics 263 * Casey Ichniowski and Kathryn Shaw PART III WITHIN FIRMS: INDIVIDUALS AND GROUPS *8 Employment as an Economic and a Social Relationship 315 * James N. Baron and David M. Kreps *9 Authority in Organizations 342 * Patrick Bolton and Mathias Dewatripont *10 Decisions in Organizations 373 * Robert Gibbons, Niko Matouschek, and John Roberts *11 Leadership and Corporate Culture 432 * Benjamin E. Hermalin *12 Personnel Economics 479 * Edward P. Lazear and Paul Oyer *13 Theory and Evidence in Internal LaborMarkets 520 * Michael Waldman PART IV WITHIN FIRMS: STRUCTURES AND PROCESSES *14 Technological Innovation and Organizations 575 * Pierre Azoulay and Josh Lerner *15 Hierarchies and the Division of Labor 604 * Luis Garicano and Timothy Van Zandt *16 Internal Capital Markets 655 * Robert Gertner and David Scharfstein *17 What Do Managers Do? 680 * Robert Gibbons and Rebecca Henderson *18 Corporate Governance 732 * Benjamin E. Hermalin *19 Incentives in Hierarchies 764 * Dilip Mookherjee *20 Strategy and Organization 799 * John Roberts and Garth Saloner PART V BETWEEN FIRMS *21 Vertical Integration and Market Structure 853 * Timothy Bresnahan and Jonathan Levin *22 Ownership and Organizational Form 891 * Henry Hansmann *23 Contracts between Legal Persons 918 * Lewis A. Kornhauser and W. Bentley MacLeod *24 Inter-Firm Contracts 958 * Francine Lafontaine and Margaret E. Slade *25 Relational Incentive Contracts 1014 * James M. Malcomson *26 Hybrid Modes of Organization 1066 * Claude M'enard PART VI BEYOND FIRMS *27 Corruption 1109 * Abhijit Banerjee, Rema Hanna, and Sendhil Mullainathan *28 Delegation, Control, and the Study of Public Bureaucracy 1148 * Terry M. Moe Name Index 1183 Subject Index 1203

"The defining book on the subject, The Handbook of Organizational Economics is essential reading for researchers and students looking to understand this emerging field in economics."--World Book Industry

"This definitive, thoroughly researched book shows the relevance of economic logic in analyzing firms. At the same time, it makes the case for enriching traditional market analyses to include a more detailed treatment of firms and other forms of nonmarket organizations. It is a handbook that summarizes and significantly advances research at the frontiers of organizational economics, and will serve as an indispensable guide for future work in this area."—Bengt Holmstrom, Massachusetts Institute of Technology"No longer can economics be accused of treating the organization as a black box. Gibbons and Roberts, intellectual leaders in the area of organizational economics, have assembled a comprehensive survey of how economic tools can shine a light on the messy world of organizations. The volume demonstrates that organizational economics has arrived as a mature, vigorous field that others must engage with. Every serious student of organizations and management will find inspiration and insight in this handbook."—Jesper Sørensen, Stanford University"Gibbons and Roberts have gathered a superb lineup of contributors for this self-contained book. The Handbook of Organizational Economics is essential reading for all those interested in this field at the confluence of economics and management. It achieves an excellent balance between theory, empirical approaches, and more informal renderings of organization practices. We can safely bet that this wonderful handbook will encourage new research and doctoral courses."—Jean Tirole, Toulouse School of Economics"As Herbert Simon has noted, ours is an organizational economy at least as much as it is a market economy, and this handbook is an invaluable guide to the great strides that organizational economics is making in understanding it. The contributions are uniformly thoughtful and interesting, they cover an impressive range of topics, and are uniquely attentive to developments in related social sciences. I cannot recommend it more highly."—Ezra W. Zuckerman, Massachusetts Institute of Technology"Over the past few decades, the economics of organizations has developed a body of work that has deep theoretical and empirical implications for just about every field of economics. This comprehensive overview provides lucid, readable, and often very entertaining summaries of what this relatively new field has to offer economists looking for a better understanding of, as the book puts it, 'the existence, nature, design, and performance of organizations.'"—Ray Fisman, coauthor of The Org: The Underlying Logic of the Office"This unique handbook provides a very comprehensive overview of organizational economics, with a list of contributors that reads like a who's who of top scholars in the economics profession. I can think of no other volume that even comes close. I predict that this book will be highly influential."—Wouter Dessein, Columbia University