ECON 5463 — Assignment 5

Assignment 5.

I argued in class that much of the formal literature in the economics of organization is interested not in issues of coordination but in issues of incentives. Increasingly, however, there are some formal theorists who have tackled the issue from a number of approaches. In this assignment, consider this paper:

Crémer, Jacques, Luis Garicano and Andrea Prat. 2007. "Language and the Theory of the Firm," The Quarterly Journal of Economics 122(1): 373-407 (February).

Your assignment is to distill the basic idea of the paper and to compare its argument to that of the modularity literature (especially the work of Carliss Baldwin) on the reading list.

You might also find interesting this old paper by Herbert Simon, especially the first four or five pages. No obligation to refer to it.

Simon, Herbert A. 1973. "Applying Information Technology to Organization Design," Public Administration Review 33(3): 268-278.

Due: April 14.