ORGANIZATIONAL ECONOMICS

Pablo Ruiz Verdú Universidad Carlos III de Madrid 2011-2012

Outline Course organization and grading Case study: ENRON

Course Organization Big changes with respect to previous year (please read the syllabus carefully): Different role for lectures and teacher Office hours and email questions Aula global Lectures require your active participation Lectures require that you have done your work prior to the lecture. Responsibility and class conduct

Course Organization: Lectures Different role for lectures and teacher Reduced lecture time  more work outside of the class (independent work, office hours) Class time will not be used to provide you with contents, which you then study  the contents of the course are in the assigned readings. No traditional lecture (“clase magistral”) In class: I will organize/clarify the materials, pose and solve questions You will ask questions, answer questions, participate in class discussion

Something I will not do in class: waste precious time with calculations that you can do on your own (if doubts  office hours)

Course Organization: Office hours and email The course is organized with the idea that you will make use of office hours If you don’t understand something: Ask in class Go to office hours. Office hours: Thursdays 11:15-13:00? As a general policy, I will not answer any question by e-mail. Exceptions in justified cases.

Course Organization: Aula Global You are expected to attend every lecture If you miss class, it is your responsibility to figure out what was said/done/assigned in class I will make heavy use of Aula Global, but what I say in class has precedence over Aula Global. E.g. I assign some homework not on Aula Global (or make changes to something on Aula Global)  if you don’t turn in the homework, you cannot say “It was not on Aula Global!”

Course Organization: Participation Lectures require your active participation: Sessions are organized on the assumption that you will participate actively If you don’t do so, the course will suffer (and your grades!) You’ll get a grade for class participation (10% of final grade), ranging from -10 (negative contribution) to 10.

Course Organization: Independent work Lectures require that you have done your work prior to the lecture: I will give you clear assignments (readings, cases, problem sets) prior to each session. Sessions will be targeted to students who have done their job before class Course organized to require daily work. If you don’t do your job, you will not benefit from the course (and your grade will suffer)

Responsibility and class conduct This course is designed for responsible adults This means, among other things (not exhaustive list): The class starts on time and ends on time. Class participation takes place in an orderly fashion. Respectful conduct is observed at all times (no chatting/noise/doing things unrelated to the class/disrespect towards other students). Deadlines are deadlines. Responsibility for own actions: when you take an action (e.g., not turning in an assignment on time / arriving late to class) you accept the consequences (you don’t get credit/you don’t enter the class). I hope I won’t have to, but if I have to, I will do everything within my reach to ensure adequate class conduct.

Responsibility and class conduct Phones and laptops Phones should be turned off (or at least ringer off) and be out of sight Taking phone calls (or leaving the class to take a phone call) is absolutely out of the question

Laptops can be used in class only for class purposes Use of laptops for surfing the web, personal messaging, … is not allowed

Academic honesty Any form of academic dishonesty will be penalized to the greatest extent possible. Copying / communicating with others during tests / exams  NO Getting materials without acknowledging the source  NO Clear rule: academic dishonesty  grade = 0

Readings Two textbooks: Besanko et al. (“Besanko”). Economics of Strategy 3rd edition in the library (references in syllabus to 3rd edition) 5th edition available (I will post page references to this edition as well) Milgrom and Roberts (M&R), Economics, Organization and Management May be hard to get Readings at the copy store (library): Key 152

Grading Final grade: Final exam: 50 % Team case study: 20% Review tests: 20% Active participation in class discussion of case studies: 10%

Team case study Case study assignment: you prepare and present a “case study” Teams of 2 - 3 students (depending on enrollment) Written case study Class presentation Precise instructions will come soon.

Review tests There will be several review tests during the course Goal of review tests: Give you extra incentives to keep up to date with the material. Give you feedback . Do not think of them as partial exams. If you do your daily work, you will not have to study specifically for the review tests.

Final exam Date not available yet. Exam period: January 9-21. Alternative dates: Only in justified cases (having a plane ticket is not a sufficient reason to do the exam on an alternative date) Advance notice

Photo Upload a photo (ID style, please) to Aula Global Needed to keep track of class participation

Temporary webpage For the first two weeks of the course, I will post materials on: http://www.sites.google.com/site/organizationaleconomicsuc3m

Slides I will post the slides used in class on Aula Global after the lecture in which they are used. Why? Lectures are prepared by working on the assignments (readings, exercises, etc.), not by reading the slides (slides do not replace readings) Slides will often contain solutions to assigned exercises Slides will often contain information about future assignments updated at the end of the session

Today We will start the course watching excerpts from a documentary (ENRON: The Smartest Guys in the Room) that illustrates many of the topics we’ll cover in class. Please read the questions that I distributed before watching the movie.

For next class: Prepare answers to questions  we will discuss them in class Additional readings  password: orgeco Read assigned readings: lecture notes “Introduction to Organizational Economics”. You can watch the rest of the movie online if you want.