This unit deals with the coordination and motivation problems faced by firms. More specifically this unit examines: whether firms use price or command mechanisms to allocate resources within firms; the problems associated with designing incentive contracts; the principles of efficient contract design and; the real world applications of those principles. The final section deals with the manner in which the coordination and motivation problems faced by firms determines their financial, vertical and horizontal structure.
1x2hr lecture/week, 1x1hr tutorial/week
1x250wd equivalent problem set (10%), 1x750wd written assignment (15%), 1x1hr mid-semester exam (25%), 1x2hr final exam (50%)
ECOS2001 or ECOS2901Prohibitions
ECON3003 or ECOS2306