316-330 Organisations, Economics and Incentives

316-202 Intermediate Microeconomics.

This subject is concerned with the economics of asymmetric information, when agents may have private knowledge, take hidden actions, and attempt to manipulate the knowledge, information and incentives of others. Using game theory and information economics it will cover the main techniques and results of principal-agent theory and contract theory. It will introduce students to the principles of economic design in asymmetric information environments. These tools will be applied to a variety of topics and case studies, including corporate governance, performance incentives, privatisation, regulation, outsourcing, government procurement, optimal taxation, structure of insurance markets, monopoly behaviour, agricultural contracts and share cropping.

A 2-hour end-of-semester exam (80%) and assignments totalling not more than 2000 words (20%).