Incentives and Organizations

Course content

Why do firms and other types of organizations exist? Which factors determine whether they succeed in achieving efficient levels of cooperation and coordination amongst their members? How does individual behavior and organizational performance depend on compensation structures and the allocation of tasks and responsibilities within an organization? How do coworker relationships, employees’ work morale, and the perceived fairness of one’s pay influence workplace behavior?

During the past decades, research in economics has made great progress in answering such questions by opening the “black box” of what happens within firms and other organizations. In this course, students will be introduced to the key theoretical concepts and empirical approaches that help understand the existence, design, and performance of organizations. The main part of the course will focus on the question how economic methods can be used to understand the relationship between incentives, organizational structure, and the performance of organizations. In particular, we will discuss (i) how incentives shape individual motivation and behavior, and (ii) how incentives as well as other organizational features (e.g., hierarchies, teams, authority, and delegation)  affect collective behavior and organizational performance.

Education

MSc programme in Economics – elective course

Learning outcome

After having successfully completed the course, students should be able to

Knowledge:

  • understand central theoretical insights and state-of-the-art empirical research in organizational economics.

  • understand how economic theory, “insider econometrics”, lab and field experiments, and other complementary empirical methods can be used to address applied microeconomic questions.

Skills:

  • interpret and critically assess theoretical and empirical studies on incentive provision and behavior in organizations.

  • put the results of these studies into perspective and identify limitations of the existing body of knowledge.

Compentencies:

  • apply the acquired knowledge and skills to practical questions related to incentive provision in organizations.

  • The course also equips the students with the necessary tools and skills to continue working on related topics in seminars or Master’s theses.

Lectures will supplemented with a number of guided practice sessions in which we will discuss problem sets and homework assignments. Student participation and an active discussion in class will be expected and encouraged.

The course will be based on lecture notes, research papers, and survey articles. Lecture notes are part of the mandatory readings. A detailed syllabus with required readings will be provided in the beginning of the course.

The following handbook chapters give an overview of research results in the field and provide an introduction of the theoretical concepts and main empirical approaches that will be used in class:

  • Gibbons, R. and J. Roberts (2013): “Economic Theories of Incentives in Organizations”, In Gibbons and Roberts (eds): Handbook of Organizational Economics, Princeton University Press.

  • Ichinowski, C. and K. Shaw (2013): “Insider Econometrics”. In Gibbons and Roberts (eds): Handbook of Organizational Economics, Princeton University Press.

  • Kuhn, P. and G. Charness (2011): “Lab Labor: What Can Labor Economists Learn from the Lab?”. In Ashenfelter and Card (eds): Handbook of Labor Economics, Volume 4 Part A. Amsterdam: North-Holland.

  • List, J. and I. Rasul (2011): “Field Experiments in Labor Economics”. In Ashenfelter and Card (eds): Handbook of Labor Economics, Volume 4 Part A. Amsterdam: North-Holland.

A sound knowledge of microeconomic theory as well as a sound understanding of econometric techniques are required.

Although it is recommended that students have completed the full course sequences in microeconomics and econometrics, the course can also be attended in parallel to Microeconomics III.

Schedule:
4 hours of lectures per week for 10 weeks, starting in week 40

Timetable and venue:
To see the time and location of classroom please press the link under "Se skema" (See schedule) at the right side of this page (16E means Autumn 2016).

You can find the similar information partly in English at
https:/​/​skema.ku.dk/​ku1617/​uk/​module.htm
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E16; [Name of course]””
-Select Report Type: List
-Select Period: “Efterrår/Autumn – Weeks 30-3”
Press: “ View Timetable”

ECTS
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Individual written closed book exam at the computers of Copenhagen University
The exam assignment is given in English and must be answered in English.
Aid
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100 % censorship
Criteria for exam assessment

Students are assessed on the extent to which they master the learning outcome for the course.

To receive the top grade, the student must be able to demonstrate in an excellent manner that he or she has acquired and can make use of the knowledge, skills and competencies listed in the learning outcomes.

Single subject courses (day)

  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • English
  • 206