Drawing on a diverse array of historical and real-world examples, chapters outline key principles of the field including division of labor, transaction costs, moral hazard, and asset specificity. This Advanced Introduction investigates ‘organization’ more broadly, delving into underexplored areas such as capabilities and routines, evolutionary selection, dynamic transaction costs, and modular systems.
Faculty publication
Professor Kai Zhao to be published in Review of Economic Studies
Professor Kai Zhao’s paper, “How Important Is Health Inequality for Lifetime Earnings Inequality?” (with Roozbeh Hosseini and Karen Kopecky), has been accepted for publication in the Review of Economic Studies, one of the top five academic journals in Economics.
In this paper, Professor Zhao and his coauthors examine an often-overlooked driver of economic inequality: health disparities. They show that health inequality is not just a reflection of broader economic disparities but a key driver of them.
Abstract:
Using a dynamic panel approach, we provide empirical evidence that negative health shocks significantly reduce earnings. The effect is primarily driven by the participation margin and is concentrated among the less educated and those in poor health. Next, we develop a life cycle model of labor supply featuring risky and heterogeneous frailty profiles that affect individuals’ productivity, likelihood of access to social insurance, disutility from work, mortality, and medical expenses. Individuals can either work or not work and apply for social security disability insurance (SSDI/SSI). Eliminating health inequality in our model reduces the variance of log lifetime (accumulated) earnings by 28 percent at age 55. About 60 percent of this effect is due to the impact of poor health on the probability of obtaining SSDI/SSI benefits. Despite this, we show that eliminating the SSDI/SSI program reduces ex ante welfare.
Professor Miceli Publishes Harm and Responsibility
Professor Thomas Miceli has published Harm and Responsibility: The Economic Factors Controlling the Extent of Civil and Criminal Liability
From the publisher:
Risk is an ever-present feature of life in a complex world, and it is important for societies to manage it in a just and efficient manner. One way to reduce risk is to assign responsibility for the associated harm. In this book, economist Thomas J. Miceli examines harm and responsibility from an economic perspective.
The book focuses on how responsibility affects people’s incentives to refrain from causing unnecessary harm to achieve what economists call optimal deterrence. Secondarily, it is concerned with the quest for justice. Defining this is part of the journey. Does it mean compensating victims for unavoidable losses? Does it involve punishing wrongdoers in proportion to the harm they have caused? Is there a clear answer? The book addresses these questions and more, explaining how, in some cases, these objectives will align with deterrence and in others they will not. The book discusses the ways that the law, tempered by religious and social norms, strikes a balance between these goals.
The principal areas of law that assign legal responsibility are tort law (for accidental harms) and criminal law (for intentional harms). There exist vibrant economic theories of both, and this volume draws on this literature. One theme that emerges is the role of causation in determining responsibility. Attributing responsibility for a given harm to the party that caused it seems both morally just (because it embodies personal responsibility), and economically desirable (because it achieves deterrence in the most direct manner). And yet the law departs from this prescription in any number of ways, both by limiting the responsibility of some who caused harm and by expanding responsibility to some who did not. The book offers readers coherent economic explanations for these departures from a purely causal basis for legal responsibility.
Author Thomas J. Miceli clarifies causation as reciprocal in nature and therefore not a uniquely defined concept. This means that when an action by A causes harm to B, the question is not how to restrain A but rather: whether A has the legal right to take the action in question or whether B has the right to prevent it. There will be a harm either way; the relevant question is which party should bear it. This insight ultimately leads to the fundamental problem of defining harm. In most conflicts this can be straightforward—as when A punches B—but in others it is more challenging. For example, when does free speech become hate speech? Where is the line drawn?
The book concludes by drawing out the implications of this fundamental ambiguity over the meaning of harm, what that means for the law, and what economic theory has to say about it.
Professor Kathleen Segerson Published in Science
Professor Segerson, a Board of Trustees Distinguished Professor of Economics at the University of Connecticut, has made significant contributions to the field of environmental economics. Her research focuses on the incentive effects of environmental policy instruments, particularly on legal rules and principles applied to environmental problems.
Dr. Segerson recently served as the lead author in an article published in the journal Science, where she and her colleagues highlight the hidden costs of green subsidies. They warn that while these subsidies can promote sustainability, they may also lead to increased consumption and market distortions. The authors advocate for clear end dates and cautious application to avoid long-term reliance and negative spillover effects.
As described in UConn Today:
Green Subsidies May Have Hidden Costs, Experts Warn
Some subsidies that appear to encourage sustainability are not so simple
Government subsidies for business practices and processes should be approached with caution, even when they seem to be environmentally friendly, writes a group of scientists and economists in this week’s Policy Forum in the journal Science.
They argue that subsidies can alter market pressures, leading to unintended consequences that not only perpetuate harmful subsidies over time but also diminish the overall effectiveness of those intended to promote environmental sustainability.
Therefore, when they must be used, subsidies should have clear end-dates, advise the authors.
“We’ve got this odd juxtaposition of trying to get rid subsidies in some sectors, and then ramping up subsidies in others,” says lead author Kathleen Segerson, Board of Trustees Distinguished Professor of Economics at the University of Connecticut. “The question that interested me was: is this a good thing or a bad thing?”
The full article is online at
https://today.uconn.edu/2024/10/green-subsidies-may-have-hidden-costs-experts-warn/
Professor Sung Hoon Choi to be published in Econometric Theory
Professor Sung Hoon Choi’s recent article titled “Large Global Volatility Matrix Analysis Based on Observation Structural Information” has been accepted for publication in Econometric Theory, one of the leading scholarly journals in theoretical econometrics.
Abstract
In this paper, we develop a novel large volatility matrix estimation procedure for analyzing global financial markets. Practitioners often use lower-frequency data, such as weekly or monthly returns, to address the issue of different trading hours in the international financial market. However, this approach can lead to inefficiency due to information loss. To mitigate this problem, our proposed method, called Structured Principal Orthogonal complEment Thresholding (Structured-POET), incorporates observation structural information for both global and national factor models. We establish the asymptotic properties of the Structured-POET estimator, and also demonstrate the drawbacks of conventional covariance matrix estimation procedures when using lower-frequency data. Finally, we apply the Structured-POET estimator to an out-of-sample portfolio allocation study using international stock market data.
Recent PhD Graduates Publish on Wealth Inequality


Recent UConn graduates Aaron Cooke (2018 PhD, U.S. Department of the Treasury) and Umesh Ghimire (2021 PhD, Commonwealth University of Pennsylvania) have had their paper accepted for publication in Macroeconomic Dynamics.
The paper examines the impact of life-cycle savings, intergenerational transfers, and fertility differences between the rich and the poor on the wealth distribution in the United States


This paper is a joint work with Dr. Hyun Lee (former UConn faculty) and Professor Kai Zhao. The key message of the paper is that the fertility differences between the rich and the poor significantly amplify the role of bequests in shaping the U.S. wealth inequality.
You can find the paper here
Professor Langlois and “The Corporation and the Twentieth Century in UConn Today

Professor Langlois and his book “The Corporation and the Twentieth Century: The History of American Business Enterprise” are featured in the most recent UConn Today:
An Alternate View of The American Corporation: Economist Reassesses Twentieth-Century Business
Economist Richard Langlois presents a sweeping new take on so-called managerialism in his acclaimed book
Americans have in recent years become fascinated with the 1950’s and 60’s, as seen in the fascination with hit TV series like “Mad Men,” “The Marvelous Mrs. Maisel,” “Call the Midwife,”and so many others. The mid-to-late-twentieth century has acquired a sheen of romance, becoming in people’s imaginations an era of social connection, “good” jobs and prosperity.
But according to one UConn economist, these so-called golden years, which relied on the success of the modern American corporation, were far from what they seem in hindsight.
In “The Corporation and the Twentieth Century: The History of American Business Enterprise,” Richard Langlois, Professor and Head of Economics, explains how the American corporation rose to prominence, prospered, and eventually died a dismal death.
The book, which was favorably reviewed in the Wall Street Journal and the Financial Times and was picked as a Foreign Affairs best book of 2023, argues that although the corporation as an institution remains crucial to economic growth and prosperity, the large and extensive corporate structures that dominated much of the twentieth century were something of an aberration rather than a norm.
He writes that extensive managerial corporations were creatures of the mid–twentieth century’s economic and political events – the Depression, the New Deal, and World War II.
The full article is online at:
An Alternate View of The American Corporation: Economist Reassesses Twentieth-Century Business
Professor Langlois reviewed in the Financial Times
Professor Langlois Reviewed by the Wall Street Journal
A review of Professor Langlois’s recent book, The Corporation and the Twentieth Century: The History of American Business Enterprise was featured in the July 1st edition of The Wall Street Journal. Reviewer Dan Akst describes Professor Langlois’s book as “…a remarkable achievement, not least for its detailed case studies of firms and whole industries that instantiate the author’s points.”
The full review is available online at The Wall Street Journal
Professor Langlois’s book can be purchased online from Princeton Press: The Corporation and the Twentieth Century: The History of American Business Enterprise
Professor Langlois publishes The Corporation and the Twentieth Century: The History of American Business Enterprise
Professor Langlois’s book The Corporation and the Twentieth Century, a “definitive reframing of the economic, institutional, and intellectual history of the managerial era,” has been published and is available through Princeton University Press:
The twentieth century was the managerial century in the United States. An organizational transformation, from entrepreneurial to managerial capitalism, brought forth what became a dominant narrative: that administrative coordination by trained professional managers is essential to the efficient running of organizations both public and private. And yet if managerialism was the apotheosis of administrative efficiency, why did both its practice and the accompanying narrative lie in ruins by the end of the century? In The Corporation and the Twentieth Century, Richard Langlois offers an alternative version: a comprehensive and nuanced reframing and reassessment of the the economic, institutional, and intellectual history of the managerial era.
Langlois argues that managerialism rose to prominence not because of its inherent superiority but because of its contingent value in a young and rapidly developing American economy. The structures of managerialism solidified their dominance only because the century’s great catastrophes of war, depression, and war again superseded markets, scrambled relative prices, and weakened market-supporting institutions. By the end of the twentieth century, Langlois writes, these market-supporting institutions had reemerged to shift advantage toward entrepreneurial and market-driven modes of organization.
This magisterial new account of the rise and fall of managerialism holds significant implications for contemporary debates about industrial and antitrust policies and the role of the corporation in the twenty-first century.
https://press.princeton.edu/books/hardcover/9780691246987/the-corporation-and-the-twentieth-century
“Sharp analysis. . . . Chock -full of sophisticated economic theory rendered in lucid prose, this adds up to a bracing evaluation of a consequential and once dominant commercial entity.”—Publishers Weekly
“A new and even better Alf Chandler has arisen, a Chandler who does not believe that the visible hand is always and everywhere the way to wealth. Langlois does the scientific job brilliantly, and does wisely, too, the political job of seeing the lessons for our collective lives.”—Deirdre Nansen McCloskey, University of Illinois at Chicago
“Richard Langlois’s The Corporation and the Twentieth Century is a major achievement and stands as the best and most important work on the history of the modern American business corporation.” —Tyler Cowen, George Mason University
“Langlois provides an erudite and wide-ranging reinterpretation of the rise and subsequent decline of large managerial corporations in American business history. His emphasis on the political economy context and contingency is important.”—Geoffrey Jones, Harvard Business School
“Langlois offers a profound, accessible, and essential revision of the economic, institutional, and intellectual history of the managerial era. His book is a magisterial, lively, provocative, and timely read.” —Amar Bhide, author of The Venturesome Economy
“In the last half century American high-tech firms and overseas new entrants have eclipsed classic twentieth-century Chandlerian corporations like General Motors and Du Pont. Richard Langlois’s masterpiece—long trailed in thoughtful articles and here distilled and rectified into fine whiskey—pulls no punches where they are necessary for his clinical deconstruction of the Chandlerian paradigm, but is properly respectful of its strengths, carefully weighing the merits of all sides of the argument.”—Leslie Hannah, London School of Economics
“This is a magnificent book. Drawing upon Coase, Williamson, Demsetz, Schumpeter, Hofstadter, and others, Langlois provides an analytical narrative of the development and adaptability of business organizations, their challenges, and responses from the late nineteenth through the early twenty-first centuries. To present this important and complex story of institutional innovation, Langlois combines economic, business, political, and legal history. Langlois’s important analysis of the past 100 years provides optimism for continuation of business enterprise adjustments to promote economic growth and the quality of life.”—Gary D. Libecap, University of California, Santa Barbara, and National Bureau of Economic Research
“Richard Langlois challenges Alfred Chander’s claim that new technologies led large firms inevitably to substitute for markets: the visible hand. Langlois argues that as markets developed more sophistication in the twentieth century, the internal structure of firms changed: the vanishing hand. A combination of markets, firms, and governments explains the rise, decline, and transformation of the corporation in the twentieth-century United States. The book is a rich economic history of the twentieth century from the corporate perspective.”—John Joseph Wallis, University of Maryland and University of Cambridge
“Richard Langlois has written a history of the corporation with three main threads. First, he offers a critique of the Chandler tradition arguing that the Chandler model becomes less applicable after 1972 or so. Second, he offers a critique of U.S. antitrust policy that highlights its liabilities. Third, he offers his own view of the evolution of the corporation, which is a major contribution to understanding the evolution of the corporation in the late twentieth and early twenty-first centuries.”—Louis P. Cain, Northwestern University and Loyola University Chicago