Organisations, Economics and Incentives

Subject ECON30017 (2016)

Note: This is an archived Handbook entry from 2016.

Credit Points: 12.5
Level: 3 (Undergraduate)
Dates & Locations:

This subject is not offered in 2016.
Time Commitment: Contact Hours: Two 1-hour lectures and a 1-hour tutorial per week
Total Time Commitment:

Estimated total time commitment of 170 hours
Prerequisites:

The following:

Subject
Study Period Commencement:
Credit Points:
Semester 1
12.50
Corequisites:

None
Recommended Background Knowledge:

Please refer to Prerequisites and Corequisites.
Non Allowed Subjects:

None
Core Participation Requirements:

For the purposes of considering request for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Student Support and Engagement Policy, academic requirements for this subject are articulated in the Subject Overview, Learning Outcomes, Assessment and Generic Skills sections of this entry.

It is University policy to take all reasonable steps to minimise the impact of disability upon academic study, and reasonable adjustments will be made to enhance a student's participation in the University's programs. Students who feel their disability may impact on meeting the requirements of this subject are encouraged to discuss this matter with a Faculty Student Adviser and Student Equity and Disability Support: http://services.unimelb.edu.au/disability

Contact

jun.xiao@unimelb.edu.au

Subject Overview:

This subject is concerned with the economics of asymmetric information, when agents may have private knowledge, take hidden actions, and attempt to manipulate the knowledge, information and incentives of others. Using game theory and information economics it will cover the main techniques and results of principal-agent theory and contract theory. It will introduce students to the principles of economic design in asymmetric information environments. These tools will be applied to a variety of topics and case studies, performance incentives, regulation, government procurement, structure of insurance markets, monopoly behaviour, agricultural contracts and share cropping.
Learning Outcomes:
  • Understand the concepts of economics of information and be able to apply them to explain the contracts within organisations
  • Analyse a firm’s behaviour under different contractual structures
Assessment:

A 2-hour end-of-semester examination (50% or 60%), a mid-semester examination in Week 7 (20% or 30%) and an in-course assignment totalling no more than 2000 words due in Week 3, 5, 9, 11 (20%)

The final mark will be calculated by weighting the end-of-semester exam at 50% and the mid-semester exam at 30% OR by weighting the end-of-semester exam at 60% and the mid-semester exam at 20%, whichever gives the higher mark to the student.
Prescribed Texts:

You will be advised of prescribed texts by your lecturer.
Breadth Options:

This subject potentially can be taken as a breadth subject component for the following courses:

You should visit learn more about breadth subjects and read the breadth requirements for your degree, and should discuss your choice with your student adviser, before deciding on your subjects.

Fees Information: Subject EFTSL, Level, Discipline & Census Date
Generic Skills:

  • High level of development: problem solving.

  • Moderate level of development: application of theory to practice; interpretation and analysis; critical thinking; evaluation of data and other information.

  • Some level of development: statistical reasoning; receptiveness to alternative ideas.
Related Majors/Minors/Specialisations: Master of Economics electives

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