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, etc. 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. The course helps prepare students for a wide range of careers in which they will face the challenge of advising or managing firms. Such professions include positions in the management of firms themselves or management consulting firms.
We will discuss both 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 (and games of incomplete information) is a prerequisite.