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ES30040: Economics of incentives

[Page last updated: 20 April 2021]

Academic Year: 2021/2
Owning Department/School: Department of Economics
Credits: 6      [equivalent to 12 CATS credits]
Notional Study Hours: 120
Level: Honours (FHEQ level 6)
Period:
Semester 2
Assessment Summary: EX100
Supplementary Assessment:
ES30040C - Resit Examination (where allowed by programme regulations)
Requisites: Before taking this module you must take ES20011
Aims: The aim of this course is to provide an understanding of the effects of asymmetric information on the incentives of agents involved in various situations of economic interaction.

Learning Outcomes: On completion of this course the student should be able to demonstrate an understanding of and be able to formally model moral hazard and adverse selection, and solve problems involving these concepts.

Skills: Ability to critically analyse problems characterised by asymmetric information and develop solutions.

Content: This course is concerned with formal analysis of various situations of trade between agents who have different information. The specific topics that will be covered are:
(a) Auction Theory: Private value auction; the optimal design of auctions; common value auctions; the winner's curse;
(b) Non-linear pricing;
(c) Moral Hazard Theory: Principal-agent moral hazard problems; incentive problems in employment contracts; multiple agent problems;
(d) Adverse Selection Theory: The revelation principle; examples including the control of externalities, revelation of preferences for public goods, price discrimination and the regulation of a monopolist with private information.

Programme availability:
NB. Postgraduate programme information will be added when the postgraduate catalogues are published in August 2021

ES30040 is Optional on the following programmes:

Department of Economics
  • UHES-AFB03 : BSc(Hons) Economics (Year 3)
  • UHES-AAB03 : BSc(Hons) Economics with Study year abroad (Year 4)
  • UHES-AKB03 : BSc(Hons) Economics with Year long work placement (Year 4)
  • UHES-AFB04 : BSc(Hons) Economics and Mathematics (Year 3)
  • UHES-AAB04 : BSc(Hons) Economics and Mathematics with Study year abroad (Year 4)
  • UHES-AKB04 : BSc(Hons) Economics and Mathematics with Year long work placement (Year 4)
  • UHES-ACB04 : BSc(Hons) Economics and Mathematics with Combined Placement and Study Abroad (Year 4)
  • UHES-AFB01 : BSc(Hons) Economics and Politics (Year 3)
  • UHES-AAB01 : BSc(Hons) Economics and Politics with Study year abroad (Year 4)
  • UHES-AKB01 : BSc(Hons) Economics and Politics with Year long work placement (Year 4)
  • UHES-ACB01 : BSc(Hons) Economics and Politics with Combined Placement and Study Abroad (Year 4)
  • UHES-ACB03 : BSc(Hons) Economics with Combined Placement and Study Abroad (Year 4)

Notes:

  • This unit catalogue is applicable for the 2021/22 academic year only. Students continuing their studies into 2022/23 and beyond should not assume that this unit will be available in future years in the format displayed here for 2021/22.
  • Programmes and units are subject to change in accordance with normal University procedures.
  • Availability of units will be subject to constraints such as staff availability, minimum and maximum group sizes, and timetabling factors as well as a student's ability to meet any pre-requisite rules.
  • Find out more about these and other important University terms and conditions here.