2010/2011 KAN-FSM_FS57 Theory of the Firm
English Title | |
Theory of the Firm |
Course Information | |
Language | English |
Point | 7,5 ECTS (225 SAT) |
Type | Mandatory |
Level | Full Degree Master |
Duration | One Semester |
Course Period |
Autumn
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Time Table | Please see course schedule at e-Campus |
Study Board |
Study Board for MSc in Economics and Business Administration |
Course Coordinator | |
Nicolai FossStefan Linder | |
Main Category of the Course | |
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Last updated on 29 maj 2012 |
Learning Objectives | |||||
The course provides an introduction to the modern microeconomics of firm organization. It surveys central concepts such as asymmetric information, efficiency, incentive conflicts, property rights,
specific assets, etc., and show how these in a game theoretic setting constitute the building blocks of an economic approach to organizations. The course surveys principal-agent theory, transaction cost economics and property rights theory, and develops business applications of these theories. As
such the course provides students with a fundamental toolbox to analyze issues of fundamental importance to business strategy (how should the firm compete in a given market?), corporate strategy (which markets should the firm compete in?), and, in particular, organizational
strategy (how should the organization be designed to serve strategic ends?). Among the issues that are analyzed are the make or buy decision, internal organization, low and high powered performance incentives, optimal patterns of ownership, and hybrid arrangements (such as
franchising). | |||||
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Examination | |||||
Prerequisites for Attending the Exam | |||||
Course Content | |||||
Fundamental game theoretic notions (strategies, normal and extensive form games, Nash equilibrium, subgame perfection), the meaning of efficiency, the Coase theorem, general equilibrium, problems of delegation: principal-agent theory, transaction cost economics, self-enforcing contracts, ownership, bounded rationality and organizational decision-making. Course status | |||||
Teaching Methods | |||||
Lectures | |||||
Literature | |||||
George Hendrikse (2003). Economics and Management of Organizations. McGraw-Hill. |