EC3305 Incentives, Contracts and Markets

Academic year

2024 to 2025 Semester 2

Further information on which modules are specific to your programme.

Key module information

SCOTCAT credits

20

The Scottish Credit Accumulation and Transfer (SCOTCAT) system allows credits gained in Scotland to be transferred between institutions. The number of credits associated with a module gives an indication of the amount of learning effort required by the learner. European Credit Transfer System (ECTS) credits are half the value of SCOTCAT credits.

SCQF level

SCQF level 9

The Scottish Credit and Qualifications Framework (SCQF) provides an indication of the complexity of award qualifications and associated learning and operates on an ascending numeric scale from Levels 1-12 with SCQF Level 10 equating to a Scottish undergraduate Honours degree.

Planned timetable

When confirmed, check online https://timetables.st-andrews.ac.uk/.

This information is given as indicative. Timetable may change at short notice depending on room availability.

Module coordinator

Dr L Bridet

This information is given as indicative. Staff involved in a module may change at short notice depending on availability and circumstances.

Module Staff

Luc Bridet

This information is given as indicative. Staff involved in a module may change at short notice depending on availability and circumstances.

Module description

Incentives economics (also known as economics of information and contract theory) studies interactions between economic agents in the presence of information asymmetries, such as sellers being better informed than buyers about product quality, or workers knowing better than employers the cost of exerting effort in a given task. Incentives economics is part of the core toolkit of modern graduate-level micro- and macroeconomics. This module introduces basic models featuring risk-sharing, private information and moral hazard, and covers a selection of applications among the following: workers compensation, corporate finance, equal pay communes, pricing, insurance, and higher education.

Relationship to other modules

Pre-requisites

PERMISSION OF THE ECONOMICS HONOURS ADVISER

Assessment pattern

Coursework (Quizzes) = 10%, Class Test = 30%, 2-hour Written Examination = 60%

Re-assessment

2-hour Written Examination = 100%

Learning and teaching methods and delivery

Weekly contact

20 hours of lectures over 11 weeks, 1-hour tutorial (x 5 weeks).

Scheduled learning hours

25

The number of compulsory student:staff contact hours over the period of the module.

Guided independent study hours

175

The number of hours that students are expected to invest in independent study over the period of the module.

Intended learning outcomes

  • Manipulate and apply the core models of bilateral contracting under symmetric information
  • Manipulate and apply the core models of bilateral contracting under asymmetric information pre-contract (hidden information) and post-contract (hidden action)
  • Explain empirical observations in labour markets, in retail, and within firms using the core models
  • Relate contracting problems to insurance/incentives trade-offs, rent extraction/efficiency trade-offs, and selection/participation margins