Organisational Economics studies the design of firms and other economic institutions. It develops frameworks which are applied to the problems faced by managers and entrepreneurs. How should incentives be designed in organisations? How should an organisation optimally choose its staff, allocate individuals to tasks within the organisation and then coordinate their actions? Which tasks should be outsourced? How do the answers to these questions depend on external factors such as market competition and technological developments? Tools from game theory, information economics and behavioural economics are introduced and applied to analyse these (and other) problems.
Learning Outcomes
Upon successful completion, students will have the knowledge and skills to:
- Analyse and design incentive contracts with regard to asymmetric information and non-contractibility with either performance or welfare goals.
- Evaluate the factors which determine the optimality and relative performance of authority structures in firms and institutions relative to market based solutions.
- Analyse and design decision making structures in organisations with reference to 1 and 2 above.
- Identify drivers of organisational structure and boundary choices and evaluate the welfare consequences.
Other Information
The majority of economic activity occurs not in markets but in firms and other kinds of economic institutions like hospitals, schools and government agencies. This course will undertake an economic analysis of which activities occur within organisations, how these activities are structured and why. The main tools developed will be the design of incentive contracts, the theory of the firm (boundaries of the firm), models of authority relations and modern economic decision-making theory.
Indicative Assessment
- Problem sets (15) [LO 1,2,3,4]
- Mid-semester exam (35) [LO 1,2,3,4]
- Final exam (50) [LO 1,2,3,4]
In response to COVID-19: Please note that Semester 2 Class Summary information (available under the classes tab) is as up to date as possible. Changes to Class Summaries not captured by this publication will be available to enrolled students via Wattle.
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Workload
2 hours of lecture and 1 hour of tutorial per week. Plus approximately 7 hours of works outside class.
Inherent Requirements
Not applicable
Requisite and Incompatibility
Prescribed Texts
Gibbons, R., and J. Roberts. 2013. R. Gibbons and J. Roberts (eds.), The Handbook of Organizational Economics. Princeton, NJ: Princeton University Press.
Preliminary Reading
Bolton, P. and M. Dewatripont. 2005. Contract Theory. Cambridge, MA: M.I.T. Press.
Fees
Tuition fees are for the academic year indicated at the top of the page.
If you are a domestic graduate coursework or international student you will be required to pay tuition fees. Tuition fees are indexed annually. Further information for domestic and international students about tuition and other fees can be found at Fees.
If you are an undergraduate student and have been offered a Commonwealth supported place, your fees are set by the Australian Government for each course. At ANU 1 EFTSL is 48 units (normally 8 x 6-unit courses). You can find your student contribution amount for each course at Fees. Where there is a unit range displayed for this course, not all unit options below may be available.
| Units | EFTSL |
|---|---|
| 6.00 | 0.12500 |
Course fees
- Domestic fee paying students
| Year | Fee |
|---|---|
| 2020 | $4500 |
- International fee paying students
| Year | Fee |
|---|---|
| 2020 | $6000 |
Offerings, Dates and Class Summary Links
ANU utilises MyTimetable to enable students to view the timetable for their enrolled courses, browse, then self-allocate to small teaching activities / tutorials so they can better plan their time. Find out more on the Timetable webpage.
Class summaries, if available, can be accessed by clicking on the View link for the relevant class number.
First Semester
| Class number | Class start date | Last day to enrol | Census date | Class end date | Mode Of Delivery | Class Summary |
|---|---|---|---|---|---|---|
| 4663 | 24 Feb 2020 | 02 Mar 2020 | 08 May 2020 | 05 Jun 2020 | In Person | View |