040388 KU Personnel Economics I (MA) (2024S)

Topics of this course include:
I. Introduction
(a) Effective vs. efficient contracting: the Salomon Brothers case
(b) Reasons for contractual incompleteness
(c) Some basic terms to describe compensation systems
II. Selection and Recruitment
(a) Setting the Base Wage
(b) Private Information and Pre-Contractual Opportunism
(c) Foundations of Adverse Selection Problems
(d) Signaling and Segmented Labor Markets
(e) Screening for Recruitment
(f) Human Capital Investments as Bonding Devices
III. Setting Incentives
(a) Forms of Incentive Pay
(b) The Basics of Effective Incentives
(c) The Trade-off in Explicit Performance Pay Contracts
(d) The LEN-Model: Developing the "Rules of Thumb" of Incentive Setting

Attendance:
Given the limited number of available places, it is strongly recommended to attend the first introductory meeting, otherwise vacant places will be fulfilled.

Other information:
Other relevant information regarding the detailed structure of the course, office hours, suggested readings will be provided in class.