Course 2025-2026 a.y.

The course covers three interconnected macro-topics:

Firm Boundaries: Explores the fundamental determinants of firm organization through Coase's transaction cost theory, incomplete contracts theory, and authority structures. Topics include vertical integration decisions, asset specificity problems, and the delegation of decision rights within organizations.

Resources and Governance: Examines how financial constraints shape firm behavior, covering credit rationing, information asymmetries in financial markets, and emerging financing mechanisms, including crowdfunding and platform-based financing.

Corporate Responsibilities: Investigates the tension between profit maximization and broader social objectives, corporate social responsibility frameworks, and the compatibility of social goals with market competition.

At the end of the course, students will be able to:

• Define the economic foundations of firm boundaries and transaction cost theory
• Explain the property rights approach to firm organization and vertical integration
• Identify the sources and consequences of financial frictions in firm decision-making
• Distinguish between formal and real authority in organizational structure
• Illustrate how incomplete contracts lead to hold-up problems and integration decisions
• Recognize the role of asset specificity in determining firm boundaries

At the end of the course, students will be able to:

• Analyze the economic rationale behind specific firm boundary decisions and organizations
• Assess how financial constraints influence firm behavior and strategic decisions
• Compare traditional profit-maximization approaches with stakeholder-oriented business models
• Examine the compatibility between corporate social responsibility and competitive market dynamics
• Interpret the impact of information asymmetries on firm financing and investment decisions
• Justify organizational design choices based on transaction cost and property rights theories

• Lectures
• Guest speaker's talks (in class or in distance)
• Collaborative Works / Assignments

Guest speaker sessions involve invitations to external experts who complement the theoretical foundations covered in regular lectures with specialized knowledge and practical perspectives. These sessions provide students with exposure to current research developments and real-world applications of the course concepts.

Assignments are structured tasks that require students to independently apply theoretical concepts from the course to analyze real-world scenarios, conduct research, or solve problems related to firm boundaries, governance mechanisms, and corporate responsibilities.

A mixed-format examination combining closed-ended questions (multiple choice, true/false, short definitions) that test factual knowledge and theoretical understanding, with open-ended questions requiring extended analytical responses, critical evaluation, and application of course concepts to complex scenarios. 

Continuous assessment based on students' engagement during lectures and guest speaker sessions, including quality of questions asked, contributions to discussions, and demonstrated understanding through interactive participation.

Required Textbooks:

• Tirole, Jean (1988). "The Theory of Industrial Organization." MIT Press
• Tirole, Jean (2006). "The Theory of Corporate Finance." Princeton University Press

Additional Materials: Research papers will be assigned for each session, including seminal works by Grossman-Hart-Moore (property rights), Aghion-Tirole (authority in organizations), Holmstrom-Tirole (financial constraints), and Benabou-Tirole (corporate social responsibility). Detailed reading lists will be provided at the beginning of each course block, with materials regularly updated throughout the semester.