In this class, we explore the economic consequences of property rights and government regulation, as well as the origin of these institutions and policies. We focus particular attention on innovation and the government’s role in fostering innovation.
We examine the following questions:
- What are property rights?
- What are transaction costs?
- What are market failures?
- What are public goods?
- How is regulation an extension of property rights?
- How are firms different than markets?
- What explains firms’ size, scope, product lines and business strategy?
- What is innovation, and why should we care about it?
- What effects do property rights and regulation have on innovation?
- What is the relationship between science, technology, and innovation?
In order to address these questions, we familiarize ourselves with the “new institutional economics” framework. We explore the role that property rights, transaction costs, market failures, intellectual property rights, markets, and firms competing in the marketplace have on fostering innovation and economic development. We complement this approach with basic micro-economics and employ concepts such as supply and demand curves, economies of scale, monopoly rents, quasi rents, and Ricardian rents.
We will also inquire into the causes of differences in property rights regimes and regulatory systems. Why do only some governments promote competition, protect intellectual property rights, and provide support for science and technology? Why do others focus on predation, opportunism, and redistribution? What are the different tools that governments that do promote innovation use and why?
Students are expected to complete the required readings each week, turn in short responses to the readings, and to contribute to in class discussion. Grades are awarded on the basis of these things and a final group project that will be presented in class.
Short Responses to Readings – 25%
Verbal Participation in Class – 25%
Final Project – 50%
Reading and other Assignments:
I will share a dropbox link with you all of the books (in electronic form), journal articles and unpublished papers that will be assigned as required readings. YOU DON’T NEED TO PURCHASE ANY BOOKS OR COURSE PACKETS!
Class Participation Guidelines:
Students cannot participate if they are not present to do so. Since I am serious about grading participation, the safest conclusion to draw is: attend class. Not all participation is created equal, however. You will be graded on the relevance, cogency, and persuasiveness of your oral contributions. During class discussion, you should draw from the week’s readings—which means that you should complete the readings before you have walked into class.
I realize that some people are less inclined to talk in class than others. If you tend to be reluctant to speak in public, let’s discuss strategies that will help you contribute to class discussions.
Directions for Short Responses to Readings:
Send me a list of interesting puzzles/questions/comments based on the reading assigned before our class meeting. What are the readings about? What surprised you about the readings? What did you learn the most? What do you disagree with?
So, when we meet on Mondays, make sure that you have sent these to me by Sunday at midnight. And, when we meet on Wednesdays, make sure that you have sent these to me by Tuesday at midnight. Make sure that you have done the reading and done it carefully. Make sure that these emails are well crafted and thoughtful.
You MUST send your short response paper that you share with me before class to the following email address: email@example.com
You will get organized into groups of five and choose a country. You will then identify the property rights regime and regulatory system of your country in regards to competition policy, intellectual property rights, and key economic sectors. You will also evaluate the economic consequences that these regulatory domains have, particularly in terms of promoting or discouraging innovation. Finally, you will do case studies of businesses that operate in your country or propose how a startup firm would seek to begin operations, compete, grow, and innovate.