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Industrial Organization

Contract Theory by Patrick Bolton and Mathias Dewatripont, a comprehensive textbook on contract theory suitable for use at the graduate and advanced undergraduate levels, covers the areas of agency theory, information economics, and organization theory and presents many applications in all areas of economics, especially labor economics, industrial organization, and corporate finance. The exercises at the end of the book not only review, chapter by chapter, the basic concepts introduced in the text but also explore additional ideas and applications based on teaching material accumulated over the years by the authors and other instructors of contract theory. The solutions manual to this essential text gives complete solutions to 27 of the 54 exercises in the text, allowing students to study and compare their answers and take greater advantage of this crucial part of the book. The solutions manual follows the structure of the text, grouping exercises by chapter. Chapters 2-6 cover such static bilateral contracting problems as screening, signaling, and moral hazard; chapters 7 and 8 treat multilateral contracting, including auctions, bilateral trade under private information, and multiagent moral hazard; chapters 9 and 10 explore problems of repeated bilateral contracting; and chapters 11-13 cover incomplete contracts, the theory of ownership and control, contracting with externalities, and common agency. Arthur Campbell, Moshe Cohen, Florian Ederer, and Johannes Spinnewijn are all Ph.D. candidates in Economics at MIT.

Despite the vast research literature on topics relating to contract theory, only a few of the field's core ideas are covered in microeconomics textbooks. This long-awaited book fills the need for a comprehensive textbook on contract theory suitable for use at the graduate and advanced undergraduate levels. It covers the areas of agency theory, information economics, and organization theory, highlighting common themes and methodologies and presenting the main ideas in an accessible way. It also presents many applications in all areas of economics, especially labor economics, industrial organization, and corporate finance. The book emphasizes applications rather than general theorems while providing self-contained, intuitive treatment of the simple models analyzed. In this way, it can also serve as a reference for researchers interested in building contract-theoretic models in applied contexts.The book covers all the major topics in contract theory taught in most graduate courses. It begins by discussing such basic ideas in incentive and information theory as screening, signaling, and moral hazard. Subsequent sections treat multilateral contracting with private information or hidden actions, covering auction theory, bilateral trade under private information, and the theory of the internal organization of firms; long-term contracts with private information or hidden actions; and incomplete contracts, the theory of ownership and control, and contracting with externalities. Each chapter ends with a guide to the relevant literature. Exercises appear in a separate chapter at the end of the book.

Downloadable instructor resources available for this title: solutions to all exercises in the book

Interest in intellectual property and other institutions that promote innovation exploded during the 1990s. Innovation and Incentives provides a clear and wide-ranging introduction to the economics of innovation, suitable for teaching at both the advanced undergraduate and graduate levels. It will also be useful to legal and economics professionals. Written by an expert on intellectual property and industrial organization, the book achieves a balanced mix of institutional details, examples, and theory. Analytical, empirical, or institutional factors can be given different emphases at different levels of study.

Innovation and Incentives presents the historical, legal, and institutional contexts in which innovation takes place. After a historical overview of the institutions that support innovation, ranging from ancient history through today's government funding and hybrid institutions, the book discusses knowledge as a public good, the economic design of intellectual property, different models of cumulative innovation, the relation of competition to licensing and joint ventures, patent and copyright enforcement and litigation, private/public funding relationships, patent values and the return on R&D investment, intellectual property issues arising from direct and indirect network externalities, and globalization. The text presents technical and abstract analysis and at the same time sheds light on current controversies and policy-relevant topics, including the difficulty of enforcing copyright in the digital age and international protection of intellectual property.

Over the past twenty years, the study of industrial organization--the analysis of imperfectly competitive markets--has grown from a niche area of microeconomics to a key component of economics and of related disciplines such as finance, strategy, and marketing. This book provides an issue-driven introduction to industrial organization. It includes a vast array of examples, from both within and outside the United States. While formal in its approach, the book is written in a way that requires only basic mathematical training. Supplemental materials posted on the Web make more extensive use of algebra and calculus.

Downloadable instructor resources available for this title: solution manual

Leading and Following in the Post-Modern Organization

For many companies, the past decade has been marked by a sense of turbulence and redefinition. The growing role of information technologies and service businesses has prompted companies to reconsider how they are structured and even what business they are in. These changes have also affected how people work, what skills they need, and what kind of careers they expect. One critical change in how people work, argues Larry Hirschhorn, is that they are expected to bring more of themselves psychologically to the job. To facilitate this change, it is necessary to create a new culture of authority—one in which superiors acknowledge their dependence on subordinates, subordinates can challenge superiors, and both are able to show their vulnerability.

The first chapters of this book examine the covert processes by which people caught between the old and new culture of authority neither suppress nor express their feelings. Feelings are activated but not directed toward useful work. The case studies of this process are instructive and moving. The book then explores how organizations can create a culture of openness in which people become more psychologically present. In part, the process entails an understanding of the changes taking place in how we experience our own identity at work and that of "others" in society at large. To do this, the book suggests, we need a social policy of forgiveness and second chances.

Technical innovation has moved to center stage in contemporary debates on economic theory and policy, and Chris Freeman and Luc Soete have played a prominent part in these debates. For this new edition of The Economics of Industrial Innovation, they have rewritten all the existing chapters and added ten new ones that address recent advances in theory and in policymaking. In the new chapters they deal with the international dimensions of technical change including underdevelopment, technology transfer, international trade, and globalization. They have also strengthened the historical account of the rise of new technologies, a main feature of earlier editions. They take advantage of their experience on projects for the OECD, the European Union, and industry in other new chapters on "The Information Society" and on environmental issues, as well as in the updated discussion of science and technology policy.

The Theory of Industrial Organization is the first primary text to treat the new industrial organization at the advanced-undergraduate and graduate level. Rigorously analytical and filled with exercises coded to indicate level of difficulty, it provides a unified and modern treatment of the field with accessible models that are simplified to highlight robust economic ideas while working at an intuitive level.To aid students at different levels, each chapter is divided into a main text and supplementary section containing more advanced material. Each chapter opens with elementary models and builds on this base to incorporate current research in a coherent synthesis.Tirole begins with a background discussion of the theory of the firm. In part I he develops the modern theory of monopoly, addressing single product and multi product pricing, static and intertemporal price discrimination, quality choice, reputation, and vertical restraints.In part II, Tirole takes up strategic interaction between firms, starting with a novel treatment of the Bertrand-Cournot interdependent pricing problem. He studies how capacity constraints, repeated interaction, product positioning, advertising, and asymmetric information affect competition or tacit collusion. He then develops topics having to do with long term competition, including barriers to entry, contestability, exit, and research and development. He concludes with a "game theory user's manual" and a section of review exercises.

Downloadable instructor resources available for this title: solution manual

Theory and Applications

This upper-level undergraduate text provides an introduction to industrial organization theory along with applications and nontechnical analyses of the legal system and antitrust laws. Using the modern approach but without emphasizing the mathematical generality inherent in many of the arguments, it bridges the gap between existing nontheoretical texts written for undergraduates and highly technical texts written for graduate students. The book can also be used in masters' programs, and advanced graduate students will find it a convenient guide to modern industrial organization.The treatment is rigorous and comprehensive. A wide range of models of all widely used market structures, strategic marketing devices, compatibility and standards, advertising, R&D, as well as more traditional topics are considered in versions much simplified from the originals but that retain the basic intuition.Shy first defines the issues that industrial organization addresses and then develops the tools needed to attack the basic questions. He begins with perfect competition and then considers imperfectly competitive market structures including a wide variety of monopolies, and all forms of quantity and price competitions. The last chapter provides a helpful feature for students by showing how various theories may be related to particular industries but not to others.Topics include: the basics needed to understand modern industrial organization; market structure (monopoly, homogenous products, differentiated products); mergers and entry; research and development; economics of compatibility and standards; advertising; quality and durability; pricing tactics; marketing tactics; management, compensation, and information; price dispersion and search theory; and special industries.

Downloadable instructor resources available for this title: instructor's manual