3.00 credit hours
Economic activity is guided not only by the invisible hand of the market, but also by the visible hand of management. This class uses microeconomic concepts to understand different ways of organizing economic activity, including firms, cooperatives, and state-owned enterprises. The course focuses on the roles of information, property rights, and incentives in determining the origin and performance of different types of organizations. We look at problems faced by real organizations, examining questions such as, are Facebook and Uber fundamentally new types of firms? Why do some firms offer high-paying jobs while competitors in the same industry do not (eg, Costco vs. Wal-mart)? What are the impacts of different kinds of contracts with workers and supply chain firms on incentives to work hard, invest, and innovate? Should firms maximize shareholder value, or something else? Why are firms often not able to survive disruptive innovation? Are venture capitalists promoters or thwarters of innovation? An objective of the course is to give students a rigorous understanding of fundamental principles that will allow them to examine their own careers, even as many features of the economy change dramatically.
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