Universidade Nova de Lisboa

Universidade Nova de Lisboa

Nova School of Business and Economics

Organization and Incentives

Code

2400

Academic unit

null

Department

null

Credits

3,5

Teacher in charge

Guido Maretto

Teaching language

English

Objectives

We will use recent advances in organizational economics to analyze several issues in a coherent framework. We will start with a general look at the effects of a firm´s organization ability to perform and compete 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 ideas regarding information and motivation (namely moral hazard, hold up, screening and adverse selection) and the possible solutions. Textbook material and in class teaching are supplemented with news, article cases and empirical studies to better substantiate the analysis.

Prerequisites

N/A

Subject matter

  • 1. Strategy and Organization

  • 2. Incentives

  • 3. Hiring

  • 4. Long Term Relations and Firm Structure

  • 5. The Hold Up problem and Firm Structure

  • 6. Information, Power and Divisions

  • 7. Financing and Incentives

  • 8. Most Recent Developments (As the discipline has been booming in the last few years, students and instructor will choose together some issues to discuss in the final part of the class, in view of some "2015" material which will be presented - and distributed - to students).

    • 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%.

    • Courses