Econ 174 Discussion Questions

Coase Discussion Questions.

Alchian and Demsetz Discussion Questions.

Jensen and Meckling Discussion Questions

Takeover Discussion Questions

Preparing for the McDonald's Case

The goal of this is to apply what you have learned so far in class, particularly the material about incentive contracting, to a real-world situation. This case ("Big Mac's Pay Plans", in the APS reader) is over twenty years old, but it serves as a good platform for discussion. It is one of the best known business cases ever published.

Prepare however you wish. You are allowed to prepare with others in the class if you wish. What I recommend is that you read the case through thoroughly a couple of times, jotting down the details of each of the alternative compensation schemes. Then think about the advantages and disadvantages of each, applying the principles of incentive contracting that we covered in class. These principles are also in Milgrom and Roberts, Chapter 7. Before constructing your analysis, it is extremely useful to determine the answers to the following questions:

You are expected to thoroughly prepare for this discussion. Prepare as if you each worked for a consulting firm (specializing in executive compensation) hired to advise me. Firms expect their consultants to provide answers to any relevant question they ask; I expect the same from you. You need not memorize all of the details of the case -- this is not a trivia contest -- but you are expected to provide sound analysis when called upon.

Klein, Crawford, and Alchian Discussion Questions

Hart Discussion Questions

Chandler Discussion Questions (I)

Chandler Discussion Questions (II)

  • According to Chandler, what explains why British firms lost their dominant position in the dye industry?

  • Nelson and Winter Discussion Questions

    Milgrom and Roberts Discussion Questions

    Holmstrom and Milgrom Discussion Questions

    You are responsible for the introduction (p. 201-3), and the empiricial evidence and conclusion (p. 216-9).