The course aims to develop and deepen the understanding of how the internal organization of firms works. One may imagine a firm as a web of social and economic ties in which several players make many decisions day in day out. For instance, workers decide how much effort to put in their work; managers decide who to promote and hire; firm owners decide whether to give managers any decision-making power. In this course, we will look at these decisions through the lens of an economist. Doing so will help us gain insight into the behavior of these individuals in a unique economic setting. We will discuss classical contributions and more recent developments (such as leadership, innovation and creativity, and discrimination and preferential treatment). We will cover topics ranging from personnel economics to the theories of the boundaries of the firms. While we will predominantly discuss theoretical studies, we will also look at some relevant empirical and experimental literature. A basic grasp of game theory is a prerequisite.
Prerequisites: ECO 2101 (Microeconomic Theory I), ECO 2102 (Microeconomic Theory II)