Economic Organizations and Markets (20840)

Degree/study: degree in Economics
Year: 2nd
Term: 2nd
Number of ECTS credits: 5 credits
Hours of studi dedication: 125 hours
Teaching language or languages: Spanish
Teaching Staff: Benito Arruñada, Petar Balachev, Montserrat Vergés, Mircea Epure, Ivette Fuentes

1. Presentation of the subject

  "Economic Organizations and Markets" examines the main concepts and theories of Organizational Economics at an intermediate level within an integrated framework.  Its goal is to give students a set of tools to help them analyze business problems, take business decisions (especially those related to human resource management), and better understand the business environment.

The course is organized into three blocks:

•    Individual behavior in business and markets.

•    The structure and management of individual and divisional incentives.

•    The interaction between organizations and their environment, not only economic but also political and institutional.

In order to follow the course, students should have mastered the content of the first year courses "Business Economics", "Microeconomics 1", "Introduction to Economics" and "Introduction to Game Theory".  In addition, some English language readings will be assigned.

The course is intended to develop students' independent analytical capacity.  It is therefore crucial to study the required readings thoroughly before coming to class, to prepare the cases and exercises, and to participate actively in class discussions.  Seeking out additional information on day-to-day economic and business activities and relating it to cases will also count positively in a student's final evaluation.

2. Competences to be attained

General skills

Analytical capacity Communication ability Work discipline

Specific skills

Understanding the concepts and theories on the syllabus. The ability to apply rigorously the concepts and theories on the syllabus to the analysis of real business problems. The ability to choose, integrate and apply the appropriate concepts and theories to the analysis of specific case studies. The ability to express, both verbally and in writing, such analysis.

3. Contents

Block 1. The individual behavior

Topic 1. New cognitive perspectives

Topic 2. Business implications of Evolutionary Psychology

Block 2. The economic organization

Topic 3. Incentive management

Topic 4. Delegation and divisionalization

Block 3. The institutional environment

Topic 5. The market versus the state

Topic 6. Institutional support of private contracting

Topic 7. The role of business in society

4. Assessment

The course is based on the principle of continuous student evaluation with an important weight on the acquisition of knowledge and skills. 

1.    With this in mind, seminar participation, both individual analyses of exercise and cases as well as participation in discussions, will make up 30% of the total grade, while the exam will make up 70%.  To pass the course, both grades-that of the exam and class participation-must be at least "Pass" ("Aprobado").

2.    In the case of failing the course, the participation grade will carry over to the September exam, meaning that the September exam will again make up 70% of the overall grade for the course. Therefore, failing (suspender) the seminar grade will mean the student must repeat the course the following academic year.

3.    Passing grades from either seminar participation or exams will not carry over into future academic years.

4.    The will be no exceptions to these rules. 

5. Bibliography and teaching resources

5.1. Basic bibliography

o    ARROW, J.K. (1973), "Social Responsibility and Economic Efficiency," Public Policy, 21, 1973, 301-317

o    ARRUÑADA, B. (1990), Economía de la empresa: un enfoque contractual. Barcelona: Ariel.

o    ARRUÑADA, B. (1998), Teoría contractual de la empresa. Madrid: Marcial Pons.

o    ARRUÑADA, B. (2008), "Human Nature and Institutions", in Eric Brousseau and Jean-Michel Glachant, eds., New Institutional Economics: A Guidebook, Cambridge: Cambridge University Press, pp. 81-99.

o    BRICKLEY, J. A., C. W. SMITH Jr., y J. L. ZIMMERMAN (2007), Organizational Architecture. A Managerial Economics Approach. 4^th ed. Chicago: Irwin.

o    COWEN, T. (2007), Discover Your Inner Economist, New York, NY: Dutton.  (Traducción española: Descubre al economista que llevas dentro, Barcelona: Planeta, 2008).

o    CROOK, C. (2005), "The Good Company", The Economist, 20 January.

o    FEHR, E., y A. FALK (2002), "Psychological Foundations of Incentives", European Economic Review, 46(4-5), 687-724.

o    FRANKLIN, D. (2008), "Just Good Business", The Economist, 17 January.

o    FRIEDMAN, M. (1970), "The Social Responsibility of Business is to Increase its Profits", New York Times Magazine, 13 September.

o    HAYEK, F.A. (1945), "The Use of Knowledge in Society", The American Economic Review, 35(4), 519-530.

o    KERR, S. (1995), "On the Folly of Rewarding A, while Hoping for B", Academy of Management Executive, 9(1), 7-14.

o    Nicholson, N. (1998), "How Hardwired Is Human Behavior?", Harvard Business Review, 76(4), 134-147.

5.2. Teaching resources

- The relevant extracts from the readings will be available in a dossier in OCE, along with other potentially relevant chapters and excerpts.

- Additional materials for each group will be available through Aula Global, Moodle or other means.

6. Methodology

The methodology of the course is based on the autonomy of the student, the role of the professor as mentor, and systematic and continued work.

Specifically, students should:

1.    Study the corresponding reading for each topic before it is covered for the first time.  (See activity schedule below.)

2.    Read and think about the readings before the classes.

3.    Make a special effort to identify and synthesize the most important aspects of each reading.

4.    Ask the professor questions before, during, or after class, not by email.

5.    Attend all classes.

6.    Answer the professors' questions during lectures and seminars.

7.    Turn in all assigned class exercises before the seminar in which you are going to discuss them.

8.    Except in specific circumstances in which you have been told otherwise, students should not send emails to professors.

9.    Students shall not enter the classroom once the class has started.

For their part, professors will:

1.    Go over the main points of each topic in class and resolve doubts and questions.

2.    Evaluate the level of understanding and familiarity with the material, asking questions in each class to randomly chosen students about readings and cases.

3.    Illustrate the application of the theoretical material via exercises and cases.

4.    Indicate in class any additional materials for seminars, and post them on Moodle, Aula Global or other media accessible to the students.

7. Planning of activities

Week	Classroom activity Session number / type of activity
Week 1	Session 1: Introduction Session 2: Topic 1
Week 2	Session 1: Topic 1 Session 2: Topic 1
Week 3	Session 1: Topic 2 Session 2: Topic 2 Session 3: Seminar
Week 4	Session 1: Topic 2 Session 2: Topic 3
Week 5	Session 1: Topic 3 Session 2: Topic 3 Session 3: Seminar
Week 6	Session 1: Topic 4 Session 2: Topic 4 Session 3: Seminar
Week 7	Session 1: Topic 4 Session 2: Topic 5 Session 3: Seminar
Week 8	Session 1 Topic 5 Session 2: Topic 6 Session 3: Seminar
Week 9	Session 1: Topic 6 Session 2: Topic 7 Session 3: Seminar
Week 10	Session 1: Topic 7 Session 2: Final issues and questions

Reminders

1.    Students must thoroughly study the reading corresponding to each topic before the first session in which it will be discussed.

2.    Students must make a special effort to select and synthesize the most important ideas from each reading.

3.    Each professor will indicate in class and distribute by different means any additional materials for seminars.