Section Description Provided by Instructor
This course will focus on the role of professionals in creating value through transaction engineering. The first eight weeks will be devoted to barriers to transacting -- including information problems, transaction costs, credibility of enforcement, strategic behavior, contracting over time -- and a range of responses to those problems, such as option theory, decision theory, risk management, reputation markets, incentive alignment, and techniques for eliminating information asymmetries. In the last five weeks of the course, students working in teams will apply the tools developed in the first half to a series of real transactions; 50% of the grade in the class will depend on this team project. The goal of the course is to explain both how private parties actually order their commercial interactions and to develop a systematic theory of how they ought to do so.
Regular class attendance is required. In addition, students must attend the first two class meetings in person in order to retain their registration priority. Anyone who cannot attend these meetings due to extenuating circumstances should e-mail the instructors so that they are not dropped from the roster.
Textbook: Kaplow and Shavell, Contracting (Foundation Press, 2004) - ISBN-13: 978-1587788086 and instructor-edited coursepack.
Method of Evaluation: Short memos (10%), group paper (50%), and final exam (40%).
MW 10:40 a.m.–12:30 p.m.
Method of Evaluation
Paper and Exam
J.D. Writing Credit