The main aims of this course are to present an analysis, using the approach and techniques of modern economics, of the co-ordination and motivation problems that arise due to increasing specialisation, and the potential solutions to these problems in the form of various types of contracts and governance structures.

Lectures: 10 x 2-hour lectures.

An additional 2-hour revision lecture.

Tutorials: 5 x 1-hour tutorials

None.

1. In-course exam: online; Individual; 60 minutes; 40%; ILOs 1, 3, 4, 5.
2. Degree exam: in-person; Individual; 120 minutes; 60%; ILOs 1, 2, 4, 5.

The aim of this course is to provide students with the opportunity:

■ To apply tools developed in intermediate microeconomics to a variety of (business and economics) situations characterised by asymmetric information, including the relations between managers and employees, stockholders and mangers, insurance companies and potential clients, and sellers and buyers of used cars.

■ To learn how incentives and social institutions can help to overcome problems created by such asymmetric information. 

By the end of this course, students should be able to:

1. formulate well-organised arguments and communicate effectively specific economic issues in written and graphical form;

2. formalise and critically analyse models involving asymmetric information and to use these models to explain a variety of economic phenomena surrounding business economics that cannot be understood using full information models;

3. critically analyse realistic problems that confront consultants, managers, policy makers, entrepreneurs and others which are incompletely specified;

4. apply microeconomic analysis to critically evaluate business events and everyday problems;

5. effectively use mathematical methods to develop problem-solving skills, perform proofs and prepare for further graduate studies in the areas of economics/finance/management.