Instructional goals
This course aims at presenting in a simple though rigorous form the main models in contract theory.
Contract theory studies the class of relations between allocative efficiency, norms, contractual relations and incentives systems. As such, contract
theory forms the formal ground for a variety of managerial and entrepreneurial practices. More to the point, it aims at understanding and managing
those phenomena related to surplus creation relative to social interactions under contractual incompleteness’ assumption.
Prerequisites
Fundamentals of microeconomics, probability theory and linear algebra.
Intended learning outcomes
Knowledge and understanding:
The main outcome of the course is giving the student both awareness and familiarity with the theory’ main models. At the very same time, a working knowledge of the theory together with an understanding of its applicability to real world situations will be given.
Applying knowledge and understanding:
The students will be able to identify situations that can lead to inefficiency and useful instruments to mitigate or avoid it.
Making judgements:
We expect students to be able to assess the sustainability and effectiveness of arrangements meant to govern economic relationships within organization as well as outside them, highlighting their strengths and weaknesses.
Moreover, students would be able to get insights about occurrence of specific economic and social phenomenon.
Communications Skills:
This course will give the students the possibility to acquire and understand major terms and concepts in order to communicate their ideas, proposals, analysis and critical reasoning in an appropriate way, but at the same time being able to convey effectively insights and economic implications to a non-specialized audience.
Learning skills:
This course will contribute to empower learners giving them very versatile tools that can be applied to many economic contexts. They can also be combined with knowledge from other disciplines to provide more accurate or alternative analysis.
Course Contents
Efficiency, incentive schemes, contractual
incompleteness, agency relations, moral hazard, adverse selection. screening, signaling, reputation, property rights
Reference Books
Nicita, A. e Scoppa, V. Teoria dei Contratti, Carocci,
Roma, qualsiasi edizione.
Some slides and lecture notes
Teaching Methods
Lectures, cold calling, practices, group work with presentations.
Assessment Method
The attending student will be evaluated on the basis of the scores achieved on:
20% of the final grade: group presentations of scientific and no-scientific articles, case studies. Students, that will be grouped according to the professor, will have to deliver 2 group presentations. By means of these it is intended to verify the analysis ability. Through these we intend to verify the analytical and comprehension skills of texts, as well as the communication and team-building skills.
50% of the final grade: EBL project. In the first week we will present a research question that the different groups will have to develop into a final report. It will be closed by the last week. Updating and coaching meetings will be scheduled in the course. Through this activity we intend to provide and verify the mastery of a studying and research autonomous method related to the filed.
30% of the final grade: written exam. Final written test consists of multiple choice questions, with which the student have to demonstrate knowledge of the theoretical notions of teaching and know how to apply them in practical cases.
The failure to achieve at least a score of 18/30 will result in failure to pass the exam.
There will be a distinction between no-attending and attending student.
The latter will be considered the student who run the group activity and accept the related grades, and is present at least 80% of the lessons.
The status of attending student will last only for the summer exam session.
The no-attending student will be considered the one who will diseregard just one of the group activities or will not accept one of the related marks.
The no-attending students will have to follow a specific exam program that will be uploaded in Luiss Learn.
Thesis assignment criteria
Successfully passing the examination and interview
Does the syllabus cover sustainability topics?
Sustainability topics will be analysed with regards to the inefficiencies and disequlibria due to asymmetric information.
Week 1 Contenuto sessioni on line e on campus
On campus session. Introduction: aims, methods and course assessment. The historical rise of the bounded rationality issue I .
On line session. Introduction to the EBL project
Week 2 Contenuto sessioni on line e on campus
On campus session. The historical rise of the bounded rationality issue II
On line session. Cognitive biases and Chief Happiness Officer
Week 3 Contenuto sessioni on line e on campus
On campus session. The historical rise of the information asymmetries issue I
On line session. The historical rise of the information asymmetries issue II
Week 4 Contenuto sessioni on line e on campus
On campus session. The historical rise of the information asymmetries issue III
On line session. Agency relations. Principal-Agent model
Week 5 Contenuto sessioni on line e on campus
On campus session. Group presentation of no-scientific articles
On line session. Updating and coaching about the EBL project
Week 6 Contenuto sessioni on line e on campus
On campus session. Moral hazard
On line session. Moral hazard: from theory to reality
Week 7 Contenuto sessioni on line e on campus
On campus session. Moral hazard: the role of cultural-institutional contexts
On line session. Work culture and moral hazard
Week 8 Contenuto sessioni on line e on campus
On campus session. Adverse selection. Akerlof ‘s model: “The Market for Lemon”
On campus session. Group presentation of scientific articles
Week 9 Contenuto sessioni on line e on campus
On campus session. Monitoring of the EBL project
On line session. Selection and signaling. Spence,s model :“ Job Market Signaling"
Week 10 Contenuto sessioni on line e on campus
On campus session. From fordist-keynesian paradigm to the instability era: the primacy of information
On line session. Shapiro- Stiglitz’s model “Equilibrium Unempolyment as a worker discipline device”
Week 11 Contenuto sessioni on line e on campus
On campus session. Firm and information from history to theory I
On line session. Firm and information from history to theory II
Week 12 Contenuto sessioni on line e on campus
On campus session. Final test
On line session. Group presentation about EBL project