organizational economics

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Organizational economics focuses on the firm itself, rather than the markets and industries. Theories of the firm look to explain why firms exist in the first place, such as agency theory and transaction cost related theories. This branch of economics is associated with the resource-based theory of strategy, that views the primary cause of advantage and sustained advantage to be the resources of the firm, not its position in an industry or market. This approach includes neo-classical microeconomics and evolutionary economics.

Organizational economics contrasts with industrial organization economics, which aligns with the positional view of strategy.