Incentives in Organizations

Description:
How does individual behavior and organizational performance depend on compensation and incentive structures, the allocation of tasks or responsibilities within an organization? How do coworker relationships, employees’ work morale, and the perceived fairness of one’s pay influence workplace behavior? How does the organization of public institutions affect their efficiency and the implementation of public policy?

During the past decades, research in economics has made great progress in answering such questions by opening the “black box” of what happens within firms and other organizations. In this course, students will be introduced to the key theoretical concepts and empirical approaches that help understand the existence, design, and performance of organizations. The main part of the course will focus on the question how economic methods can be used to understand the relationship between incentives, organizational structure, and the performance of organizations. In particular, we will discuss (i) how incentives shape individual motivation and behavior, and (ii) how incentives as well as other organizational features (e.g., hierarchies, teams, authority, and delegation) affect collective behavior and organizational performance.

Literature:
The course will be based on lecture notes, research papers, and survey articles. Lecture notes are part of the mandatory readings. A detailed syllabus with required readings will be provided in the beginning of the course.

The following handbook chapters give an overview of research results in the field and provide an introduction of the theoretical concepts and main empirical approaches that will be used in class:

• Gibbons, R. and J. Roberts (2013): “Economic Theories of Incentives in Organizations”, In Gibbons and Roberts (eds): Handbook of Organizational Economics, Princeton University Press.
• Ichinowski, C. and K. Shaw (2013): “Insider Econometrics”. In Gibbons and Roberts (eds): Handbook of Organizational Economics, Princeton University Press.
• Kuhn, P. and G. Charness (2011): “Lab Labor: What Can Labor Economists Learn from the Lab?”. In Ashenfelter and Card (eds): Handbook of Labor Economics, Volume 4 Part A. Amsterdam: North-Holland.
• List, J. and I. Rasul (2011): “Field Experiments in Labor Economics”. In Ashenfelter and Card (eds): Handbook of Labor Economics, Volume 4 Part A. Amsterdam: North-Holland.

Time & venue:
Mondays, 10:00-12:00 (starting on 21.10.2024), HU Berlin, Spandauer Str. 1, room 22
Thursdays, 08:30-10:00 (starting on 24.10.2024), HU Berlin, Spandauer Str. 1, room 203

Exam:
Written Exam  + Assignments (e.g., Presentations, Referee Reports)

More information can be found on Moodle.