Oliver Williamson and Elinor Ostrom are sharing this year’s Nobel Prize in Economics. Williamson is out of what is known as the Carnegie School of organizational economics, and is the titular head of “transaction cost economics.” If you wanted a theoretical model to help understand why Lawrence contracts out its food service rather than doing it internally, you might pick up a copy of The Economic Institutions of Capitalism. Much, much more on Williamson in the Economics of the Firm course this winter.
Ostrom is one of the founders of the Indiana School, and thinks about collective management of common property resources. She has found that private groups are often able to avoid the dreaded tragedy of the commons and become long-term stewards of common property resources. More on Ostrom in Econ 385, Natural Resource Economics.
Sadly, there was no winner in the Pick the Nobel contest. We will put the pears in the storeroom and award them to next year’s winner. See you then.