Showing papers on "Managerial economics published in 1990"

The Ethereal Hand: Organizational Economics and Management Theory

Abstract: Organizational economics, as a newer theory, has the potential to make a constructive contribution to management theory. Nevertheless, there are several inherent problems regarding its narrow model of human motivation and behavior, its negative moral characterization of managers, and its methodological individualist bias. One solution is to embrace the positive approach of the original economic formulations. The potentialities and pitfalls of organizational economics are illustrated by reference to matrix organization structures, vertical disintegration in insurance organizations, and corporate governance.

Economic Behavior and Institutions

Abstract: An important research programme has developed in economics that extends neo-classical economic theory in order to examine the effects of institutions on economic behaviour. The body of work emerging from this line of inquiry includes contributions from various branches of economic theory, such as the economics of property rights, the theory of the firm, cliometrics and law and economics. This book is a comprehensive survey of this research programme which the author terms 'neoinstitutional economics'. The author proposes a unified approach to this research, integrating the work of various contributors and emphasising the common principles of inquiry that tie the work together. The theoretical discussion is accompanied by empirical studies dealing with a range of institutions and economic systems. This book will serve as the primary resource for economists and students who want to learn about this important branch of economic theory.

The Debate Between Traditional Management Theory and Organizational Economics: Substantive Differences or Intergroup Conflict?

Abstract: Donaldson's (1990) critique of organizational economics suggests four attributes of this model that make intellectual discourse and theoretical integration with traditional management theory difficult: the assumption of opportunism, different levels of analysis, the theory of motivation, and the prescriptive character of organizational economics. It is suggested that these differences are not a sufficient explanation of the response of some traditional management theorists to organizational economics. Rather than being based on these substantive differences, it is argued that the relationship between these two models has many of the attributes of an intergroup conflict. Possible responses to this intergroup conflict and the implications that these responses may have for understanding organizational phenomena are explored.

The Human Side of Economic Organization

Abstract: The assumptions of material self-interest, bounded rationality, and negative opportunism that underlie organizational economics are deficient for many managerial purposes because they underrepresent the importance of interpersonal and other nonmarket resources in human motivation. This paper adds an aspiration-level assumption called betterment that extends transaction cost analysis to include exchanges involving interpersonal resources. Implications are discussed for the efficient design of organizational boundaries, organizational subunits, and employment relations, and special attention is given to cooperation as an organizational asset.

A Rational Basis for Criticisms of Organizational Economics: A Reply to Barney

Abstract: Contrary to Barney (1990) in his reply to Donaldson (1990), this article points out that the strength of criticism of organizational economics lies in part in apprehensions about its deleterious effects upon management theory. The article also argues that there is continuing reason to doubt that organizational economics readily lends itself to synthesis with traditional management theory. The issues of the narrowness of the motivational model in organizational economics and its offensiveness and the bias against systems-level analysis and against management are discussed.

Organizational Economics: An Impending Revolution in Organization Theory?

Abstract: Organizational economics (OE) is purported to offer a potential revolution in organization theory. This paper assesses the value of organizational economics for organization theorists. The conclusions are that OE is useful in extending theory building and empirical research in organization theory, but for OE to realize its full potential, it must draw upon organization theory to refine theory building and expand its scope.

Managerial Economics: Theory, Applications, and Cases

Abstract: The seventh edition of Managerial Economics is the most current text available, encouraging students to see beyond the equations and graphs to the general precepts, such as marginal analysis and backward induction. Its new content draws on dozens of contemporary case studies, inviting students to apply problem-solving skills and to reflect on real-world economic decisions.

Post-Keynesianism: A New Approach to Economics

Abstract: This paper is an attempt to isolate and analyze the major characteristics of post-Keynesian economics and to draw the policy implications that follow from it. In doing so I hope to show that post-Keynesian economics does in fact constitute a new approach to our understanding of economic phenomena. The ideas which are classified as post-Keynesian have, in fact, a long history. But, post-Keynesianism as a school of thought is a fairly recent development. It is really for this reason that its boundaries have not been precisely defined, if boundaries can ever be precisely defined (Dow, 1990). This could very well explain to some extent why post-Keynesian economists have not managed yet to be persuasive enough, although a number of other reasons suggest themselves. These additional reasons are that the economic issues post-Keynesians are concerned with are controversial; that there is substantial diversity in their theoretical premises; that there are ideological objections to post-Keynesianism which emanate from the orthodox character of the economics profession; and that post-Keynesians tend to define their program in a negative way as a reaction to neo-classical economics (Hamouda and Harcourt, 1988; Lavoie, 1989). Yet, there is another dimension to this argument in that there are different "approaches" that comprise post-Keynesian economics which not only differ in terms of method and economic features subsumed in their models but sometimes conflict with each other ? so much so that post-Keynesian methodol? ogy has been described as a "horses for courses" approach (Hamouda and Harcourt, 1988), as a Babylonian approach (Dow, 1985), which is tantamount to saying that it is a holistic rather than a reductionist or

Reforming economics : Calvinist studies on methods and institutions

Abstract: This work surveys all of the major sub-fields within economics from a Reformed Christian point of view. It proposes a new approach to economics, one that is explicitly normative and based on the concept of stewardship. It considers topics such as: the failure of economics to address many current economic problems; the internal failures of current economic theory; problems with the scientific methodology which forms the foundation on which contemporary economists build their work; the application of a Christian scientific methodology to economics; biblical priorities for economic science and economic life; and a Reformed Christian view of the nature of human interactions and its implications for families, firms, unions, governments, and voluntary organizations.

Game theory in economics

Abstract: During the 1980s, economic theory has been revolutionised by game theory. The game theory approach is now very widely used throughout the profession and has become a major tool for the construction of new economic models. It is the basic tool in the construction of a modern theory of industrial organisation and it has led to important developments in finance, labour economics and international trade.

Survey of Managerial Economics Textbooks

Abstract: Ten managerial textbooks copyrighted since 1986 are reviewed using these criteria: microeconomic theory range and depth; optional topics included; mathematical rigor; and support materials.

Economics 101 and an Economic Way of Thinking

Abstract: Introductory economics textbooks often in clude a section on "Why Economists Disagree." These sections point out that economists really do agree on a wide variety of issues, in spite of the public's perception that they constantly bicker and argue. One text says that "The image of widespread disagreement among economists is overrated" (8, p. 11). Another states that "There is an economic way of thinking," and that "in spite of their philosophical differences, there is common ground to the approach of economists" (3, p. 7). Still another, after quoting George Bernard Shaw that "If you took all of the economists in the country laid them end to end they'd never reach a conclusion" insists that "90 percent of economists would probably accept 90 percent of the fundamental theory presented in this book" (1, p. 7). Two recent studies sought to determine whether or not economists really do in fact agree on fundamental theory and whether or not there is an "economic way of thinking" about important issues. In one (5) a questionnaire was administered to 211 U.S. economists selected at

Managerial Economics for Business, Management, and Accounting

Abstract: *The definition and scope of managerial economics *Basic features of the firm and its environment *Business objectives and models of the firm *The importance of risk and uncertainty *Consumer behaviour and market behaviour *Demand and elasticity *Estimating and forecasting demand *Production and the determination of costs *Formal models of competitive structure *The five forces approach to competitive structure *Elements of business strategy *Pricing decisions *Pricing practice, transfer pricing and pricing for public enterprise *Non-price competition and the marketing mix *Investment decisions and the cost of capital *Policy towards competition *Industrial policy *The growth and scope of the firm *The multinational enterprise

Ethics, Economics, and Public Policy

Abstract: Society is increasingly concerned with apparently unethical behavior by the owners, managers, and employees of firms Often, two features of economic theory are believed to account for the perceived problem Together, these key features seem to make economics a cold, impersonal, mechanistic, perhaps even totalitarian discipline devoid of personality or interest in anything outside the individual The economic emphasis on individual optimizing behavior explicitly or implicitly denies, or seems to deny, a community role in decisions Critics point out, correctly, the fact that some decisions made under such an approach may benefit individuals while harming the community The possibility of monopoly profits is a particularly tender point, such seemingly unearned returns bearing many hallmarks of outright theft to some analysts Further, the "New Welfare Economics" explicitly rejected interpersonal comparison, apparently denying groups any role in economic decision making (see, for example, Graaff 1957 and Little 1957) If economics can only say that changing to another social state is justified if at least one person would be made better off while no one is harmed, it has little to contribute to intended social improvement Society is apparently denied the opportunity to improve itself, to pursue a non-efficiency criterion like equality in the distribution of income, or to plan social change Since it is apparent that society has reached better states of being over time, some view these as unethically misleading denials At first glance, neoclassical economics seems to respond to arguments claiming the model is unethical by exclusion Introductory texts in particular often exclude normative questions from their simplified positive model On further study, however, economic theory offers an alternative ethical position whose first premise is, indeed, the primacy of individual choice emphasized in Principles courses In addition, economics includes theories which may account for public choices when externalities or information asymmetries exist and which allow individual choices with ethical content Our paper has two parts First, we examine models offered by noneconomists as substitutes for the new welfare economics and which are intended to provide a more ethical basis for behavior Buchanan (1985) offered a philosopher's view of the dilemma at the heart of the apparent failure of economic welfare analysis and offered market socialism as a tentative solution Etzioni (1988, 1990) contended that ethical issues raised by economic theory, particularly the new welfare economics, can be resolved only by expanding economic theory to include the sociological perspective, an approach he calls "socioeconomics" Buchanan's and Etzioni's arguments that the new welfare economics is unsatisfactory, and Buchanan's argument that ethicists and economists would gain from dialogue, were echoed by Sen (1987) He argued that in exchange for the ethical analysis offered by philosophers and others economists could offer increased awareness of efficiency issues, particularly interaction effects In addition, he suggested that agency theory could be used to expand the scope of ethical analysis within economics Next, we consider two economic applications which illustrate the economic role of ethics First, we examine "The New Public Economics" This theory counters market socialism and socioeconomics by demonstrating that individualistic choice provides a basis for democratic public decisions Our second application is based on the economics of crime, itself an example of "Economic Imperialism" The model hypothesizes that individuals and firms may include non-pecuniary motives in their decisions