Duration: 3 hours for 13 weeks [ECTS: 6]

Aim and objectives

The aim of the course is to equip students with the basic principles, concepts, and analytical tools of the New Institutional Economics (NIE). In particular the course will enable:

• The smooth transition from the conventional neoclassical thought to the rhetoric and qualities of the Institutional Economics.
• The familiarization and understanding of the key concepts and tools availed by the NIE.
• The understanding of the contribution of the NIE approach to the analysis of the economic system.

Course Outline

• Introduction and overview of the course. From neoclassical to institutional economics.
• The economic man, behavioural hypotheses and methodological dilemmas
• The concept and theory of institutions
• Transaction costs
• Property rights
• Contractual obligations and contract theory
• Organisational structures: market, state, firm

Learning outcomes

Upon successful completion of the course, students will be able to:

• identify, articulate and explain the key concepts of NIE (inter alia: institutions, organizations, transaction, transaction costs, property rights, imperfect and relational contracts, principal-agent problem, fundamental transformation, governance structure, path dependence, credible commitment, etc.)
• identify and explain the reasons and mechanisms the give rise to institutions
• outline, compare and contrast the behavioural hypotheses of neoclassical economics and NIE
• illustrate, explain and use the Coase theorem
• clarify, explain and assess and the role and importance of specifying, monitoring and enforcing property rights
• specify and evaluate the problem of common pool resources and its solutions
• identify and assess the solutions to contractual problems