Postgraduate Course: Market Design and Policy (PLIT11021)
Course Outline
| School | School of Social and Political Science |
College | College of Humanities and Social Science |
| Credit level (Normal year taken) | SCQF Level 11 (Postgraduate) |
Availability | Available to all students |
| SCQF Credits | 10 |
ECTS Credits | 5 |
| Summary | This course will analyse the factors that lead to the creation and the scope of markets, to underscore the importance of the socio economic and institutional context of market behaviour. Part I will be an interdisciplinary foray examining works from institutional economists analysing the creation of property rights and markets, or those from economic anthropology describing collective meanings of reciprocity and exchange that, for example, shape market behaviour. Part II of the course will address specific issues such as varieties of capitalism and hierarchies, forms of regulation, social and economic underpinnings of price, and effects of technology on economies of scale and agglomeration. |
| Course description |
Markets are often reified - taken as given, with unspecified origins - in current policy and academic debates. This course will argue against this common misperception, therefore allowing students to understand the social anthropology and political economy of meanings and representations within which markets are embedded. Representing markets in this cultural sense will introduce the course. Relevant works include economist Douglass North's work on the implicit and explicit cultural meanings of markets or Susan Strange's work on casino capitalism that deconstructs current money markets and financial capitalism.
Part I: The Origins of Market and Exchange
Session 1: Property Rights
Institutional economics provides an understanding of the origins of markets in the forms of property rights -- formal or informal incentives or disincentives for undertaking exchange. As these understandings are rooted in learning and social meanings, institutional economists often start and end with models of group behaviour in property rights formation and the distributional consequences of emergent property rights.
Session 2: Reciprocity, Trust, and Risk
Sociologists and anthropologists have examined the social and cultural meanings within which exchange, reciprocity, trust and risk are located. They have often called into the question the utility maximization and the behavioural assumptions of economists to point out both the novelties and the absurdities of market exchange.
Part II: Market Evolution and Incentives in Policy and Regulation
This section will examine the ways in which market and non-market forms overlap even in high-tech finance capitalism and the ways these emerging markets are incentivized through technology, regulation, and policy.
Session 3: Markets, Hierarchies, and Varieties of Capitalism Sociologist Mark Granovetter argues that well-functioning markets assume an oversocialized economic agent (through social hierarchies), while Oliver Williamson argues that markets mean limiting of hierarchies. This session will discuss rival world views. Was Goldman Sachs under or oversocialized at the time of its collapse in 2007?
Session 4: Understanding Technology
How does technological innovation disrupt markets and offer new forms of exchange? We will discuss both the origins of futures trading with the birth of the telegraph and railways, and the emergence of FinTech with digital technologies. Technology was often taken as a constant (or exogenous condition) in economics. This session will also introduce endogenous growth theory dealing with technology.
Session 5: Regulation and Uncertainty
This session will discuss if regulation is inherently conservative, in the words of both classical Marxists and neo-classical economists, does regulation cater to status quo (and powerful)? Special attention will be paid to the role of technology in unsettling markets and organizations.
Session 6: Markets and Policy Innovation
This final session will introduce students to the functioning of markets through rule and policy-making from local to global levels. How and in what ways can policy incentives provide innovation?
Students' learning experience on this course will be transformative. The majority of students on the course are expected to be from finance and economics backgrounds, while the rest will in all likelihood be from equally positivist backgrounds, such as engineering and informatics. This group will therefore be exposed to a view of markets that they are unfamiliar with. This experience should broaden their thinking with regards to the limitations of existing market structures and encourage them to challenge long-held notions.
The course will be taught over six interactive lecture sessions, totalling 12 lecture (contact) hours.
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Entry Requirements (not applicable to Visiting Students)
| Pre-requisites |
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Co-requisites | |
| Prohibited Combinations | |
Other requirements | None |
Information for Visiting Students
| Pre-requisites | None |
| High Demand Course? |
Yes |
Course Delivery Information
| Not being delivered |
Learning Outcomes
On completion of this course, the student will be able to:
- Understand basic tenets from political economy, and economic anthropology and sociology on theformation of markets
- Apply interdisciplinary understandings for understanding the emergence of markets, especially infinancial technologies but also for emerging markets in the developing world
- Propose alternative ways in which markets, and policies and regulations thereof, may evolve drawingupon understandings from political economy, sociology, and anthropology
- Be able to operationalize key concepts and provide data for illustrating theory-driven hypotheses forissues in markets, regulation, and policy
- Identify problems with existing understandings of market design and policy and propose solutions
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Reading List
Acemoglu, Daron, and James A. Robinson. 2006. "Economic backwardness in political perspective." American Political Science Review 100: 115-131
Arnuk, Sal, and Joseph Saluzzi. 2012. Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street are Destroying Investor Confidence and Your Portfolio. London: FT Press.
Beniger, James. 1986. The control revolution: Technological and economic origins of the information society. Harvard university press.
Borch, Christian. 2016. 'High-frequency trading, algorithmic finance and the Flash Crash: reflections on eventalization.' Economy and Society, 45(3-4): 350-378.
Carey, James W. 1983. "Technology and ideology: The case of the telegraph." Prospects 8: 303-325.
Coase, Ronald Harry. October 1960. "The problem of social cost." The Journal of Law and Economics 56:4. 837-877.
Evenson, Robert E., and Larry Westphal. 1995. "Technological change and technological strategy." Handbook of development economics 3, pp. 2209-2299
Ferguson, James. 2006. Global shadows: Africa in the neoliberal world order. Duke University Press.
Granovetter, Mark. 1985. "Economic action and social structure: The problem of embeddedness." American Journal of Sociology 91:3. 481-510.
Greif, Avner. 2006. Institutions and the path to the modern economy: Lessons from medieval trade. Cambridge University Press.
Greif, Avner. 1993. "Contract enforceability and economic institutions in early trade: The Maghribi traders' coalition." The American Economic Review. 525-548.
Grossman, Gene M. and Elhanan Helpman. Winter 1994. "Endogenous Innovation in the Theory of Growth," Journal of Economic Perspectives 8, pp. 23-44.
Guyer, Jane I. 2004. Marginal Gains: Monetary Transactions in Atlantic Africa. Chicago: The University of Chicago Press.
Kindleberger, Charles. (2011 [1978]). Manias, panics and crashes: a history of financial crises. 6th ed. Palgrave Macmillan.
Machlup, Fritz. 1962. The production and distribution of knowledge in the United States. Princerton, NJ: Princeton university press.
North, Douglass C. 1994. 'Economic Performance through Time.' American Economic Review. 84:3. 359-368.
---, 1990. Institutions, Institutional Change and Economic Performance. Cambridge, UK: Cambridge University Press.
Singh, J.P. 2008. Negotiation and the Global Information Economy. Cambridge: Cambridge University Press.
Soskice, David W., and Peter A. Hall. 2001. Varieties of capitalism: The institutional foundations of comparative advantage. Oxford: Oxford University Press.
Stigler, George J. 1971. "The theory of economic regulation." The Bell journal of economics and management science. 3-21.
Strange, Susan. 2015. Casino capitalism. Oxford: Oxford University Press.
Williamson, Oliver. 1983. Markets and Hierarchies: Analysis and Anti-trust Implications. New York: Free Press. |
Additional Information
| Graduate Attributes and Skills |
The course will de-mystify the 'razzle-dazzle' world of markets and financial technologies. Students will be able to employ historical and interdisciplinary concepts in analysing the emergence of all types of markets and identify both the uniqueness and historical dependence of current forms of market behaviour.
By taking this course, students should be able to:
1. Engage with new ideas and be able to detect false logic by leveraging available resources
2. Demonstrate critical thinking skills and ingenuity required to identify and sustainably exploit opportunities, for example, in capital markets.
3. Demonstrate the ability to evaluate assumptions and statements |
| Keywords | Not entered |
Contacts
| Course organiser | Prof Jatinder Pal Singh
Tel: (0131 6)51 1624
Email: JP.Singh@ed.ac.uk |
Course secretary | Mrs Gillian MacDonald
Tel: (0131 6)51 3244
Email: gillian.macdonald@ed.ac.uk |
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