Forty Concepts to Change the World/or Pass Exams With
1. SSP paradigm. Definitions of institutions and the distinction from organizations.
2. Property as power vs economizing. Conflict vs harmony.
3. Kinds of power: Decision, event, agenda, value. Exchange, threat, and love.
4. Interdependence-externalities. Externalities are ubiquitous, not special case. What is the difference between pollution and hunger as externalities?
' cf. "Free" market vs. regulation or planning. Mutual coercion.
6. Opportunity set. Rights distinguished from capacity. Types of transactions (structures or governance). Adm. bargaining, status-grant. Williamson's hierarchy vs mkt. Bouondaries.
7. Institutions as constraints vs enablement and shaper of preferences. Conventions.
8. Substantive performance, cf. efficiency, productivity. Distinction among: Impact analysis, welfare econ. and institutional change theories.
9. How does pure competition limit the use of power? What sources of interdependence are not directed by competition or factor ownership?
10. Bounded, procedural, and substantive rationality. Satisficing vs. utility max. Lexicographic choice. C-D Gap and SOP's. Sequential attention to goals. Radical subjectivity..
11. The role of rationality assumptions and knowledge of preferences in economic prediction.
12. Methodological individualism and methodological institutionalism. Transaction as unit of observation.
13. Selective perception, cognitive interpretation of "facts". Asymmetric value functions--items coded as gains or losses. Allais Paradox (regret). Passion.
14. Reinforcement, learning, endogenous preferences, learn by doing. Socialization.
15. Forward looking calculation vs. unconscious reinforcement. S-B-R. Reasoning why vs. Seeing that.
16. Multiple self, split brain, hierarchy of the mind. Need for reasons. Meta-preferences. Multiplicity of goals.
17. Cognitive frames and opportunism. Concern for others. Learning of trust. Commitment. Docility.
18. Resistance to change. Inert areas. Cognitive dissonance.
19. What interdependence is created by incompatible use and what rights direct it? Factor ownership and competition. Wealth effects of IUG distribution. Effect on prices. Interdependence of allocation and distribution.
20. What interdependence is created by the degree of exclusion cost and what rights control it? Inclusive, exclusive and latent groups. Effect of group size. Exploitation of the great by the small.
21.. What sort of institutions direct HEC interdependence?
cf. gambling free rider, unwilling rider, unwitting rider, joy rider, horseless would-be-rider. Alternative ways to unhorse the free rider.
22. Behavior that depends on the behavior of others.
23. Prisoner's dilemma. Chicken game. Can you sketch out the defining matrices and their implications? Social trap. Micromotives and macrobehavior.
How can passions be reasonable? Can a trusting person survive? Role of fairness in achieving Pareto-better trade.
24. Transaction costs and institutional change. Efficient institutions?
25. What interdependence is created by transaction costs and what rights direct it? Transaction costs: information (measurement), contractual, uncertainty, C-D gap, radical subjectivity. Effect alone and when combined with uncertainty and opportunism. Implications of friction metaphor--is everyone better off if they are reduced?
26. Consequence of injunctive vs. damage relief.
27. HIC consequences with no asset specificity. Product liability.
28. Asset specificity (immobility). Cf. specific assets, fixed assets, and fixed cost. What if there are no cardinal measures of asset spec. or transaction costs? Reason for incomplete contracts. Role of frequency of contracting, bounded rationality, opportunism with guile in bilateral transactions. Extend specific asset concept to consumer opportunism and effect of business cycles. The "fundamental transformation."
29. How prevent over-investment caused by uncertainty about the plans of others (strategic uncertainty)?
30. What is on the horizontal axis of a figure illustrating economies of scale vs MC=0? What interdependence is created by both and what rights direct it? Price/variety tradeoff. Interdependence of buyers. Pricing rules. Who bears fixed cost and who just pays MC?
31. What interdependence is created by MC=0? What rights direct it? To what performance? With JIG (low avoidance) issue is who pays how much. With JIG (high avoidance and pre-emption) there is the additional question of who chooses. In what terms is avoidance cost measured? What interdependence is created by degree of preemption? How is preemption cost measured? Meaning of subsidy.
32. Implications of Super-ordinary econ. of scale? Duplication has higher unit cost vs cost of regulation. Performance with franchise bidding?
33. Path dependency with econ. of scale. Equilibrium or instability. Circular and cumulative causation.
34. Hierarchy, markets, centralization-decentralization. Organizations.
35. What do economies of scale, MC=0, and overhead costs have in common? Implications for choice of rights? Equilibrium conditions?
36. X-Efficiency. Micro-micro theory. Role of slack.
37. Consumer and producer surplus. How do they arise and how do rules affect who can take advantage of them? (optional topic)
38. Implications of demand and supply fluctuations including peak load demand? Distributive implications of market clearing? (optional topic)
39. Institutional change (evolution): role of transaction costs, C-D gap, path dependency re: econ. of scale.
40. In what sense can there be private governance? Legal-economic nexus.
41. cf. the neo-classical, Williamson, Ostrom, and SSP paradigms. What are their agendas, variables, hypothesized relationships?
What key sources of interdependence have we missed?
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