ECON 4897-001 Economics of Organizations

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ECON 4897-001 Economics of Organizations
Fall 2014
Jin-Hyuk Kim
Assistant Professor
Office: 14B Economics bldg.
Lectures: T,TH 2PM - 3:15PM
Class Location: Econ 117
Office Hours: Mon 1:30-3PM
Wed 10:30-12noon
(or by appointment)
Course Description
This course introduces students to the literature on economics of organizations.
Opening the black box of the firm beyond the neoclassical model has been an active
research area in the last few decades. This course will examine various issues both
between and within firms, developing intuition and logical thinking as an economist
as well as introducing some analytical models of contracts. Topics range from
classical theories of firm boundaries to contractual relationship between firms to
compensation and incentive issues within firms. Students can expect to be exposed to
developments in some specific industries as well as have an opportunity to do some
research on real-world problems in organizations.
ECON 3070 Intermediate Microeconomic Theory
ECON 3818 Introduction to Statistics
Milgrom and Roberts, Economics, Organization and Management, Prentice Hall.
Class notes and journal articles will be posted on D2L website.
Grading Policy
Your letter grade will be based on a mid-term exam, the final, a 7-8 page term paper,
homework, and attendance/participation. Exam questions may be both analytical and
qualitative requiring you to show clear economic logic. The mid-term enters with a
weight of .30 and the final enters with .35. The final is not cumulative. The term paper
enters with .15; biweekly homework (these will be mostly 1-2 page response papers)
enters with .15; and class attendance and participation with .05.
If you miss more than 15 lectures (i.e., roughly half the classes), then you may
fail. No make-up exams will be given without documented medical or family
emergencies, and a missed exam will result in zero. All exams and essay will be
graded by me in an anonymous fashion to ensure that everyone is treated equally.
Letter grades will be assigned by identifying natural cut-off points given a distribution
of total scores, which will be curved at the end of all class activities.
University Policies
All students of the University of Colorado at Boulder are responsible for knowing and
adhering to the academic integrity policy of this institution. Violations of this policy
may include: cheating, plagiarism, aid of academic dishonesty, fabrication, lying,
bribery, and threatening behavior. All incidents of academic misconduct shall be
reported to the Honor Code Council ([email protected]; 303-735-2273).
Students who are found to be in violation of the academic integrity policy will be
subject to both academic sanctions from the faculty member and non-academic
sanctions (including but not limited to university probation, suspension, or expulsion).
Other information on the Honor Code can be found at
http://www.colorado.edu/policies/honor.html and at
The University of Colorado at Boulder policy on Discrimination and Harassment,
the University of Colorado policy on Sexual Harassment and the University of
Colorado policy on Amorous Relationships apply to all students, staff and faculty.
Any student, staff or faculty member who believes s/he has been the subject of
discrimination or harassment based upon race, color, national origin, sex, age,
disability, religion, sexual orientation, or veteran status should contact the Office of
Discrimination and Harassment (ODH) at 303-492-2127 or the Office of Judicial
Affairs at 303-492-5550. Information about the ODH, the above referenced policies
and the campus resources available to assist individuals regarding discrimination or
harassment can be obtained at http://www.colorado.edu/odh
Campus policy regarding religious observances requires that faculty make every
effort to reasonably and fairly deal with all students who, because of religious
obligations, have conflicts with scheduled exams, assignments or required attendance.
In this class, please see me at least two weeks prior to any conflicts due to religious
observances. See full details at www.colorado.edu/policies/fac_relig.html
If you qualify for accommodations because of a disability, please submit a letter from
Disability Services in a timely manner so that your needs may be addressed.
Disability Services determines accommodations based on documented disabilities.
Contact: 303-492-8671, Willard 322, and www.Colorado.EDU/disabilityservices
If you have a temporary medical condition or injury, see guidelines at
Students and faculty each have responsibility for maintaining an appropriate
learning environment. Those who fail to adhere to such behavioral standards may be
subject to discipline. Professional courtesy and sensitivity are especially important
with respect to individuals and topics dealing with differences of race, culture,
religion, politics, sexual orientation, gender, gender variance, and nationalities. Class
rosters are provided to the instructor with the student's legal name. I will gladly honor
your request to address you by an alternate name or gender pronoun. Please advise me
of this preference early in the semester so that I may make appropriate changes to my
records. See polices at http://www.colorado.edu/policies/classbehavior.html and at
Course Outline
(subject to minor changes)
Week 1. Does Organization Matter? (Ch.1)
Week 2. Economic Organization and Efficiency (Ch.2)
Week 3. Using Prices for Coordination and Motivation (Ch.3)
Week 4. Coordinating Plans and Actions (Ch.4)
Week 5. Bounded Rationality and Private Information (Ch.5)
Week 6. Moral Hazard and Performance Incentives (Ch.6)
Week 7. Risk Sharing and Incentive Contracts (Ch.7)
Week 8. Rents and Efficiency (Ch.8)
Midterm Exam (Date to be announced)
Week 9. Ownership and Property Rights (Ch.9)
Week 10. Employment Policy and Human-Resource Management (Ch.10)
Week 11. Internal Labor Markets, Job Assignments, and Promotions (Ch.11)
Week 12. Compensation and Motivation (Ch.12)
Week 13. Executive and Managerial Compensation (Ch.13)
Week 14. The Classical Theory of Investments and Finance (Ch.14)
Week 15. Financial Structure, Ownership, and Corporate Control (Ch.15)
Final Exam (Date to be announced)
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