The much anticipated day is here. Contracts as Organizations -- my paper with Brayden King -- is now available on SSRN. We have submitted the paper to law reviews, but we welcome further comments. Here is the abstract:

Empirical studies of contracts have become more common over the past decade, but the range of questions addressed by these studies is narrow, inspired primarily by economic theories that focus on the role of contracts in mitigating ex post opportunism. We contend that these economic theories do not adequately explain many commonly observed features of contracts, and we offer four organizational theories to supplement – and in some instances, perhaps, challenge – the dominant economic accounts. The purpose of this Article is threefold: first, to describe how theoretical perspectives on contracting have motivated empirical work on contracts; second, to highlight the dominant role of economic theories in framing empirical work on contracts; and third, to enrich the empirical study of contracts through application of four organizational theories: resource theory, learning theory, identity theory, and institutional theory.

Outside the economics literature, empirical studies of contracts are rare. Even management scholars and sociologists, who generated the four organizational theories just mentioned, largely ignore contracts, both in theoretical and empirical analysis. Nevertheless, we assert that these organizational theories provide new lenses through which to view contracts. While economic theories of contracting focus primarily on one purpose of contracts – mitigating ex post opportunism – the four organizational theories help us understand the multiple purposes of contracts.

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Don't even try to debate the premise of this question. It's an exaggeration and it's unfair and yadda, yadda, yadda. But I have heard too many comments by economists to doubt that there is a widespread prejudice running through that profession along these lines. So let's explore some possible explanations, all of which I have heard from economists:

1. Sociologists are stupid!

2. Math: economists got there first, and sociologists are only now starting to catch up

3. Equilibrium: economists have it, and sociologists don't (that is, economists have a concept that focuses their analyses, while sociologists are scattered in their analyses)

4. Empirical Methods: economists use "hard" numbers, and sociologists use case studies, surveys, interviews, ethnographies, etc.

Though I have heard each of these "explanations" from economists, #1 is patently ridiculous. What about the other three?

UPDATE: I wrote this rather hastily in response to a comment from an economist, so I am still thinking about possible explanations. How about:

5. Economists just assume sociologists are stupid because that improves the r-squared of the economists' world view.

UPDATE2: If we did a parallel post, what should the title be? "Why do sociologists think economists are _________?"

UPDATE3: Larry Solum has some thoughts on Legal Theory Blog. The takeaway: "sociologists disagree with [economists'] fundamental assumptions and they wouldn't be considered technically sophisticated if they were economists."

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