Econ 174 Course Outline

Introduction, Basic Concepts

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.


Mon., Apr. 12

Coase: "The Nature of the Firm"

Coase in Reader. Discussion Questions. Lecture Notes.



Agency Theory and the Firm
 

Wed., Apr. 14

Alchian and Demsetz: "Production Costs,..."

Alchian and Demsetz in Reader. Discussion Questions. Lecture Notes.


Fri., Apr. 16

Bounded Rationality, Incomplete Contracting, and Moral Hazard. Lecture Notes.

M&R 126-149, 166-194.


Mon., Apr. 19

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.


Wed., Apr. 21

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.


Fri., Apr. 30

Case #1: Big Mac's Pay Plans

"Big Mac's Pay Plans" in Reader. Discussion Questions.


Mon., May 3

Topics in Incentive Contracting Problem Set 2 Due


Wed., May 5

Efficiency Wages

M&R 248-269. Efficiency Wage Handout.



Rents, Efficiency, and Organizational Form


Fri, May 7

MIDTERM EXAM


Mon., May 10

Rents, Quasi-rents, Appropriability, and Hold-ups

M&R 269-280.



Wed., May 12

Vertical Integration and Asset Specificity

Klein, Crawford, and Alchian in Reader. Discussion Questions. Lecture Notes.



Fri., May 14

Residual Control Rights, Bargaining Power, and Efficiency

Hart in Reader, M&R 288-306. Discussion Questions. Lecture Notes.


Mon., May 17

Franchising: Overview and Contractual Features

Love in Reader. ("The Franchising Derby") Lecture Notes (I).  Lecture Notes (II).
WSJ Article on McDonald's Franchisors


Wed., May 19

Case #2: Subway

Subway contract in Reader. Discussion Questions. Link to Subway's Web Site.


Organizational and Technological Change


Fri., May 21

The Visible Hand and the Evolution of the M-form

Chandler in Reader. Discussion Questions. Lecture Notes.


Mon., May 24

Technology and Organizational Invention

Chandler in Reader. Discussion Questions. Lecture Notes. Problem Set 3 Due.


Wed., May 26

Evolutionary Theory of the Firm

Nelson and Winter in Reader. Discussion Questions. Lecture Notes.



Fri., May 28

NO CLASS


Mon, May 31

NO CLASS



Wed., June 2

Modern Manufacturing and Complementarities

Milgrom and Roberts in Reader. Discussion Questions. GM Flexible Manufacturing Handout.



Fri., June 4

The Firm and Complementary Incentives

Holmstrom and Milgrom in Reader. Discussion Questions. Lecture Notes.



Mon., June 7

Information Technology and Organizations. Lecture Notes.  Problem Set 4 Due.


Wed., June 9

Case #3: Lincoln Electric

Lincoln Electric in Reader. Discussion Questions.


Fri., June 11

Review