Mon., Apr. 5
Introduction; Sloan and GM, Allen and AT&T. Lecture Notes.
Milgrom and Roberts (M&R) 2-42.
Wed., Apr. 7
Efficiency and Total Value Maximization. Lecture Notes.
M&R 19-28, 35-42.
Fri., Apr. 9
The Coase Theorem and the First Welfare Theorem. Lecture Notes.
M&R 57-69.
Coase: "The Nature of the Firm"
Coase in Reader. Discussion Questions. Lecture Notes.
Wed., Apr. 14
Alchian and Demsetz: "Production Costs,..."
Alchian and Demsetz in Reader. Discussion Questions. Lecture Notes.
Bounded Rationality, Incomplete Contracting, and Moral Hazard. Lecture Notes.
M&R 126-149, 166-194.
Jensen and Meckling: Agency and Ownership Structure
Jensen and Meckling in Reader. Discussion Questions. Lecture Notes.
Note: You are only responsible for sections 1-2.5, 4.1, 4.2, and 5.1.
Takeovers and the Market for Managers
Takeover articles in Reader. Discussion Questions. Lecture Notes. Problem Set 1 Due Solutions
Fri., Apr. 23
Incentive Contracts: Theory and Practice (1)
M&R 206-214. Risk Sharing Handout.
4/27/98 WSJ Article on Internal Monitoring
Mon., Apr. 26
Incentive Contracts: Theory and Practice (2)
M&R 214-232. Performance Incentives Handout.
Wed., Apr. 28
Intertemporal Incentives: The Ratchet Effect and Committment
M&R 232-239. Ratchet Effect Handout.
Case #1: Big Mac's Pay Plans
"Big Mac's Pay Plans" in Reader. Discussion Questions.
Topics in Incentive Contracting Problem Set 2 Due
Efficiency Wages
M&R 248-269. Efficiency Wage Handout.
MIDTERM EXAM
Rents, Quasi-rents, Appropriability, and Hold-ups
M&R 269-280.
Vertical Integration and Asset Specificity
Klein, Crawford, and Alchian in Reader. Discussion Questions. Lecture Notes.
Residual Control Rights, Bargaining Power, and Efficiency
Hart in Reader, M&R 288-306. Discussion Questions. Lecture Notes.
Franchising: Overview and Contractual Features
Love in Reader. ("The Franchising Derby") Lecture
Notes (I). Lecture Notes (II).
WSJ
Article on McDonald's Franchisors
Case #2: Subway
Subway contract in Reader. Discussion Questions. Link to Subway's Web Site.
The Visible Hand and the Evolution of the M-form
Chandler in Reader. Discussion Questions. Lecture Notes.
Technology and Organizational Invention
Chandler in Reader. Discussion Questions. Lecture Notes. Problem Set 3 Due.
Evolutionary Theory of the Firm
Nelson and Winter in Reader. Discussion Questions. Lecture Notes.
NO CLASS
Mon, May 31
NO CLASS
Modern Manufacturing and Complementarities
Milgrom and Roberts in Reader. Discussion Questions. GM Flexible Manufacturing Handout.
The Firm and Complementary Incentives
Holmstrom and Milgrom in Reader. Discussion Questions. Lecture Notes.
Information Technology and Organizations. Lecture Notes. Problem Set 4 Due.
Case #3: Lincoln Electric
Lincoln Electric in Reader. Discussion Questions.
Review