Organization and Incentives
Code
2400
Academic unit
null
Department
null
Credits
3,5
Teacher in charge
Steffen Hoernig
Teaching language
English
Objectives
This course uses recent advances to analyze organizational economics in a coherent framework. We will start with a general look at the effects of a firm´s organizational ability to perform and compete, in order to understand its fundamental role in a firm´s strategy. You will learn how organizations can promote growth and performance by giving individuals appropriate incentives, designing their jobs, allocating decision power, shaping internal communication systems, and choosing the optimal scope of activities.
We will use economic theory to intuitively present a general perspective based on a few simple but powerful ideas regarding information and motivation, namely "moral hazard", "hold up", "screening" and "adverse selection". Textbook material and in-class teaching are supplemented with news, article cases and empirical studies to better substantiate the learning experience. Content: Moral hazard and incentives, performance measures and pay, job design, careers,decisions and organization design, organizational structure, organizational scope.
Prerequisites
Subject matter
This course consists of 12 sessions of lectures and presentation of group work.
Bibliography
Main text:
Lazear, Edward P., Michael Gibbs, Personnel Economics in Practice, MIT press, 2008.
Secondary:
Roberts, John. The modern firm: Organizational design for performance and growth. OUP Oxford, 2007.
Besanko et al., Economics of Strategy, 6th edition, international student version, Wiley, 2013. (chapters 2 and 3);
Slides, articles and cases will be distributed through Moodle;
Students are encouraged to follow the business press (in particular FT.com and Economist.com, plus their home countries main outlets).
Teaching method
We shall meet twice weekly for 80 min classes. Classes are devoted to the presentation of the material by the instructor and to the discussion and presentation of group work by the students. Two take-home problem sets and one group work will allow the students to learn the concepts and the analytical modeling of the issues. Students will have to prepare for in class discussions.
Evaluation method
-Final Exam: 40% (minimum grade 9.0);
-2 quizzes: 10%;
-2 Problem sets: 20%;
-In-class participation: 10%;
-Group work: 20%.