Institutional Economics - JEB022

• Anglický název: Institutional Economics
• Zajišťuje: Institut ekonomických studií (23-IES)
• Fakulta: Fakulta sociálních věd
• Platnost: od 2025
• Semestr: zimní
• E-Kredity: 5
• Způsob provedení zkoušky: zimní s.:
• Rozsah, examinace: zimní s.:2/1, Zk [HT]
• Počet míst: neomezen / 128 (neurčen)
• Minimální obsazenost: neomezen
• 4EU+: ne
• Virtuální mobilita / počet míst pro virtuální mobilitu: ne
• Stav předmětu: vyučován
• Jazyk výuky: angličtina
• Způsob výuky: prezenční
• Poznámka: předmět je možno zapsat mimo plán; povolen pro zápis po webu; při zápisu přednost, je-li ve stud. plánu
• Garant: PhDr. Jiří Schwarz, Ph.D.
• Vyučující: Suren Karapetyan; PhDr. Jiří Schwarz, Ph.D.
• Třída: Courses for incoming students
• Prerekvizity : {Skupina prerekvizit splnitelná buď JEB004 nebo JEM163}
• Neslučitelnost : JPB331
• Je neslučitelnost pro: JPB341, JPB331, JEB165

Anotace

This course explains how institutions – formal rules, enforcement, and informal norms – shape economic behavior and performance. We build from core ideas in new institutional economics (Coase, Williamson, North, Ostrom) to analyze property rights and transaction costs; information problems and principal–agent relationships; the role of the state, credible commitment, and rent-seeking; informal institutions and institutional change; and the boundaries of the firm. Evidence and applications are emphasized throughout, including comparative and CEE examples. A capstone topic on digital platforms and marketplaces shows how “code and contracts” function as rules-in-use at scale. Weekly lectures are complemented by interactive seminars (commons game, bargaining and incentive labs, contest design, regulator design), an essay, and a team project (preparing a short video) that applies course concepts to a real setting.

Poslední úprava: Schwarz Jiří, PhDr., Ph.D. (13.09.2025)

Cíl předmětu

By the end of the course, students can:

• Diagnose when markets fail due to property rights, information, or enforcement frictions.
• Compare private ordering and public regulation and justify design choices.
• Apply principal–agent and mechanism design logic to real institutions.
• Interpret empirical evidence on institutions and recognize identification pitfalls at an intuitive level.
• Explain how institutional change and path dependence affect economic performance, including in platform settings.

Poslední úprava: Schwarz Jiří, PhDr., Ph.D. (13.09.2025)

Literatura

Buchanan, James M. 1982. Order Defined in the Process of its Emergence.

+Coase, R. H. 1998. The New Institutional Economics. The American Economic Review 88, No. 2, Papers and Proceedings of the Hundred and Tenth Annual Meeting of the American Economic Association (May, 1998), pp. 72-74.

Coase, R. H. 1974. The Lighthouse in Economics. Journal of Law and Economics 17, no. 2 (October 1): 357-376.

+Barnett, W., & Block, W. 2007. Coase and Van Zandt on Lighthouses. Public Finance Review 35(6), 710-733. doi:10.1177/1091142107302182

Coase, R. H. 1960. The Problem of Social Cost. Journal of Law and Economics 3 (October 1): 1-44.

+Meiners, Roger E. and Bruce Yandle. 1998. Common Law Environmentlaism. Public Choice 94(1-2): 49-66.

Hayek, F. A. 1945. The Use of Knowledge in Society. The American Economic Review 35, no. 4: 519-530.

+Akerlof, George A. 1970. The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics 84 (3): 488-500. doi:10.2307/1879431.

+Leeson, Peter. 2012. Ordeals. Journal of Law and Economics 55(3): 691-714.

North, Douglass C. 1991. Institutions. The Journal of Economic Perspectives 5, no. 1 (January 1): 97-112.

+Leeson, Peter. 2014. “God Damn”: The Law and Economics of Monastic Malediction. Journal of Law, Economics, and Organization 30(1): 193-216.

+Aoki, Masahiko. 2001. Toward a comparative institutional analysis. Part of part 1.

Leeson, Peter. 2007. An-arrgh-chy: The Law and Economics of Pirate Organization. Journal of Political Economy 115(6): 1049-1094.

+Skarbek, David. 2011. Governance and Prison Gangs. The American Political Science Review 105(4): 702-716.

Benson, Bruce L. 1984. Rent Seeking from a Property Rights Perspective. Southern Economic Journal 51, no. 2 (October 1): 388-400. doi:10.2307/1057819.

+Zahedieh, Nuala. 2010. Regulation, rent-seeking, and the Glorious Revolution in the English Atlantic economy. The Economic History Review 63, no. 4: 865-890. doi: 10.1111/j.1468-0289.2009.00505.x

Hall, Joshua C., Russell S. Sobel, and George R. Crowley. 2010. Institutions, Capital, and Growth. Southern Economic Journal 77, No. 2, pp. 385-405.

+Wolfers, Justin, Daniel W. Sacks, and Betsey Stevenson. 2013. The New Stylized Facts About Income and Subjective Well-Being. CAMA Working Paper 03/2013.

+McCloskey, Deirdre. 2006. The Bourgeois Virtues: Part 1 - Apology.

+Pejovich, Svetozar. 1999. The Effects of the Interaction of Formal and Informal Institutions on Social Stability and Economic Development. Journal of Markets & Morality 2, no. 2, pp. 164-181.

Dutta, Nabamita, Peter T. Leeson, and Claudia R. Williamson. 2013. The Amplification Effect: Foreign Aid’s Impact on Political Institutions. Kyklos 66(2): 208-228.

+Liebowitz, Stan J., and Stephen E. Margolis. 2000. Path Dependence. In Bouckaert, Boudewijn and De Geest, Gerrit (eds.), Encyclopedia of Law and Economics, Volume I. The History and Methodology of Law and Economics, Cheltenham, Edward Elgar.

Du, Julan, Lu, Yi, and Tao, Zhigang. 2012. Contracting institutions and vertical integration: Evidence from China’s manufacturing firms. Journal of Comparative Economics 40 (1), pp. 89-107.

+ optional readings

Poslední úprava: Schwarz Jiří, PhDr., Ph.D. (13.09.2025)

Metody výuky

Weekly lectures combine brief concept explanations with worked examples and evidence from real cases. Six 80-minute seminars use structured, TA-led activities – classroom experiments, small-group case work, and guided discussions – sequenced to cover the material covered in lectures. Students write an individual 2,000–3,000-word essay; based on chosen topics, they are grouped into teams that produce a short explainer video on their shared theme. One seminar is dedicated to planning and recording the video.

Use of Generative AI

Students are allowed to use generative AI tools in this course if and only if they are used correctly, ethically, and critically. In particular:

• ✅ You may use AI for inspiration, brainstorming, grammar checking, structuring, or exploring ideas. But always think critically about the output.
• ✅ Any use of AI must be declared (e.g. in a footnote or short note at the beginning of your work).
• ❌ Do not submit AI-generated text as your own without significant modification, your own contribution, and proper citation of original sources. Doing so is considered plagiarism.
• ❌ If AI tools are explicitly prohibited for a specific assignment or exam, you must follow that instruction.
• ⚠️ Violations may lead to disciplinary action under university rules.

For full details on the IES’s guidelines, see “AI tools when studying at IES” at the IES Guides & Manuals page.

Poslední úprava: Schwarz Jiří, PhDr., Ph.D. (26.09.2025)

Požadavky ke zkoušce

Final written exam – 30%
A comprehensive written exam at the end of the semester. 

Individual essay – 30%
An essay on one of the assigned topics scheduled mid-semester. Detailed instructions and timing are provided in class and on Moodle. 

Team presentation (video) – 10%
Based on clustered essay topics, teams produce a short explainer video that clearly communicates the institutional logic and evidence.

Reader’s diary – 20%
Each week you read one paper and submit a brief summary with comments/ideas to Moodle before the lecture; students also give short in-class summaries at the start of lectures.

Activity during seminars – 10%
Assessed engagement in the six TA-led seminars: preparation, constructive participation in discussions/experiments, completion of in-seminar tasks, and brief end-of-seminar reflections.

Attendance at seminars is mandatory; each student is scheduled to participate in a seminar once every two weeks.

Poslední úprava: Schwarz Jiří, PhDr., Ph.D. (13.09.2025)

Sylabus

1. Introduction to Institutional Economics
   What institutional analysis is; why institutions are often “invisible”; rules-in-use vs. rules-in-form; nested rule levels; the aim of explaining behavior across markets, hierarchies, and communities.
2. Old vs. New Institutional Economics & Methods of Analysis
   Historical program of OIE (Veblen, Commons, Mitchell), its decline, and the NIE turn to methodological individualism, game theory, and comparative institutional analysis; Coase’s three empirical strategies.
3. Property Rights & Transaction Costs
   Natural-law vs. legal views; Coase on externalities with positive transaction costs; Demsetz on the emergence of property rights and the barbed-wire case.
4. Information, Contracts & Principal–Agent Problems
   Imperfect information as more than “just costs”: adverse selection (credit rationing, lemons), ordeals as separating mechanisms; moral hazard (insurance, sharecropping); contractual incompleteness and the role of courts.
5. What Are Institutions? Types & Mechanisms
   Definitions (North); mechanisms/design (Hurwicz) and enforceability; equilibrium views (Greif/Aoki); institutions vs. organizations; economic vs. political; formal vs. informal.
6. Institutions as Collective Choices & Conceptions of the State
   How preferences are aggregated; Weingast’s fundamental dilemma of a strong state; the state as non-actor, cooperation nexus, group agent, and “grabbing hand.”
7. Social Conflict View & Rent Seeking
   How powerful groups shape rules; Tullock’s rent seeking and rent avoidance; legislative inflation and the role (and limits) of regulatory impact assessment.
8. Institutions & Economic Performance (Identification Challenges)
   Cross-country patterns (economic freedom and outcomes); endogeneity concerns; strategies using instruments and natural experiments (e.g., settler mortality, reversal of fortune).
9. Informal Institutions, Culture & Institutional Change
   Definitions and typology (complementary, accommodating, competing, substitutive); how informal rules complement or subvert formal ones; path dependence and lock-in; historical illustrations.
10. The Theory of the Firm & Institutional Environment
    Why firms exist beyond prices (Coase); transaction-cost economics and asset specificity (GM–Fisher Body); incomplete contracts (Hart) and how institutional quality shapes firm boundaries.
11. Capstone – Institutions for Digital Platforms & Marketplaces
    Bringing it all together: governance of two-sided markets (access, pricing, ranking), property and contract enforcement on platforms, reputation and informal governance, and regulatory interfaces.

Poslední úprava: Schwarz Jiří, PhDr., Ph.D. (13.09.2025)