Organizational Economics

AAA

DEFINITION of 'Organizational Economics'

A branch of applied economics that studies the transactions that occur within individual firms, as opposed to the transactions that occur within the greater market. Organizational economics is broken down into three major subfields: agency theory, transaction cost economics and property rights theory. Courses in organizational economics are usually taught at the graduate or doctoral level.

INVESTOPEDIA EXPLAINS 'Organizational Economics'

Organizational economics is useful in developing a firm's human resource management policies, determining how a firm should be organized, assessing business risk, implementing rewards systems and making, analyzing and improving management decisions. For example, organizational economics could be used to assess why the 2010 BP oil spill in the Gulf of Mexico was able to occur and how a similar disaster could be prevented in the future.



RELATED TERMS
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects ...
  2. Heterodox Economics

    The analysis and study of economic principles considered outside ...
  3. Macroeconomics

    The field of economics that studies the behavior of the aggregate ...
  4. Microeconomics

    The branch of economics that analyzes the market behavior of ...
  5. Behavioral Economics

    The study of psychology as it relates to the economic decision ...
  6. Neoclassical Economics

    An approach to economics that relates supply and demand to an ...
Related Articles
  1. Understanding Supply-Side Economics
    Economics

    Understanding Supply-Side Economics

  2. Nobel Winners Are Economic Prizes
    Options & Futures

    Nobel Winners Are Economic Prizes

  3. Economic Indicators That Do-It-Yourself ...
    Investing Basics

    Economic Indicators That Do-It-Yourself ...

  4. The Uncertainty Of Economics: Exploring ...
    Economics

    The Uncertainty Of Economics: Exploring ...

comments powered by Disqus
Hot Definitions
  1. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  2. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  5. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  6. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
Trading Center