School of Management, Unit Catalogue 2007/08 |
MN30094 Economics of incentives |
| Credits: 6 |
| Level: Honours |
| Semester: 2 |
| Assessment: EX70ES30 |
| Requisites: |
| Before taking this unit you must take MN20012 or (take EC20010 and take EC20045) |
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(Others with EC10044, MN10006 and placement experience should undertake preparatory reading).
Aims: This course uses economics to investigate the incentives generated by a range of contractual relationships. Students will link economic ideas to their own experiences in the workplace, and they will develop their written and oral communication skills.
Learning Outcomes: By the end of this unit, the student should be able to: * Understand the concepts of incentive compatibility and individual rationality. * Apply the models developed in the module to novel environments. * Understand and articulate the key themes developed in the module. Skills: Economic analysis (T, A) Critical thinking (T,A) Written communication (T,A) Oral presentation (F) Content: Incentives are an integral part of many areas in economics, and so the topics examined in the course come from a range of economic disciplines. The course examines the application of principal-agent models to labour markets, capital markets, insurance markets, and corporate governance issues. Some of the topics addressed in the course will be: The use of pay systems to influence the behaviour of managerial and non-managerial employees; transaction costs as the reason for the existence of contracts; the importance of institutional structures as a response to transaction costs; and moral hazard and adverse selection. |