The corner office, with equations

The Org by Ray Fisman and Tim Sullivan, which I reviewed here yesterday (The tough life of the corner office), is aimed at the general reader – and after all, almost all of us do experience working life in an organisation. A parallel book for the expert reader is the new Handbook of Organizational Economics, edited by Robert Gibbons and John Roberts. This is a technical volume, and normally wouldn’t feature in this blog. But I make an exception because of the calibre of the contributors and range of the book.

The book starts with the theoretical basics. In Chapter 1 Erik Bryjolfsson and Paul Milgrom write about ‘complementarity’ in organisations, the scope for the whole to add up to more than the sum of the parts in this specific kind of collective action context. Robert Gibbons and John Roberts cover incentives in organisations, and there are chapters on property rights and on transaction cost economics (with Oliver Williamson one of the authors). There is a section on different methodologies. Subsequent sections look ‘within’ firms, at individual behaviour and decisions, and at processes and structures (ranging from corporate governance to strategy to innovation); ‘between’ firms, looking at vertical integration, market structure, contracting; and ‘beyond’ firms, looking at corruption, and at delegation in public bureaucracies. Among the roll call of contributors are Josh Lerner, Timothy Bresnahan, Abhijit Banerjee, Luis Garicano, Ed Lazear and many others.

This is not a book anyone would sit down to read cover to cover (all 1232 pages); but pretty much every chapter will be an indispensable starting point for its subject. This handbook is the definition of magisterial.

The Handbook of Organizational Economics