Organizational Economics

This course is suitable for Master students only (7 LP) and will be held in English.

The course focuses on the provision of incentives in organizations. Since the interests of workers and their employers are not necessarily aligned, an important question is how firms can design compensation schemes or jobs to induce workers to act in the employer's interest. 

In particular, the course covers team work and tournamens, in which the relative performance of individuals determines their payoff. Apart from the standard assumption of completely rational and selfish agents (homo oeconomicus), we also consider the effect of non-standard preferences (e.g. envy, inequality aversion or status-concerns). 

The course consists of two parts. In the first part, students will become familiar with theoretical models and their predictions of individual behavior. Here, we also discuss applications to sports contests and political rent-seeking. In the second part of the course, we will study empirical and experimental evidence on actual behavior as well as advancements of the models. In the second part, students will present and critically discuss a paper from the large literature on economic incentives.