Course and Examination Fact Sheet: Spring Semester 2017
6,266: Personnel Economics
ECTS credits: 3
Overview examination/s
(binding regulations see below)
Decentral ‑ Group examination paper (all given the same grades) (40%)
Decentral ‑ Written examination (60%, 60 mins.)
Attached courses
Timetable ‑‑ Language ‑‑ Lecturer
6,266,1.00 Personnel Economics ‑‑ Englisch ‑‑ Benesch Christine
Course information
Course prerequisites
Solid knowledge of microeconomics as in Microeconomics II or a similar course. Microeconomics III may be helpful but is not
required.
Course content
The course Personnel Economics provides an introduction to Personnel Economics, the analysis of organizations and human
resource management, from an economist’s point of view.
We will apply various microeconomic tools to analyze the selection of employees and the optimal provision of incentives within
organizations. We will extend the standard principal‑agent framework to non‑standard preferences and integrate recent insights
from behavioral economics.
The recent economic crisis has challenged conventional wisdom about incentive systems within firms. Many corporate scandals,
for example in the banking sector, have been attributed to perverse incentive systems, and high executive salaries have spurred
heated public debates and political actions, such as the ʺAbzockerinitiativeʺ. The analysis in this course will, for example, help us
to understand the various intended and unintended consequences of performance pay.
The topics we will discuss are not only interesting in the light of the recent crisis and political debate, but are also relevant as a
general strategic management topic. Employees are the most important resource in todayʹs service oriented and knowledge
intensive firms. Optimizing personnel resources is therefore one of the most relevant business strategies.
The course can not only be recommended to future strategic management consultants, HR‑practitioners and policy makers, but
to all students who are interested in applying their theoretical microeconomics knowledge to concrete, practically and politically
relevant questions and who want to learn how to use economic theory to develop decision making strategies.
Lectures will be based on textbook chapters as well as on recent economic research and, both, theoretical models and empirical
studies will be discussed. In‑class exercises, problem sets and a policy debate will complement the lectures.
The goals of the course are to apply economic theory and data analysis to concrete questions organizations might face and to
critically evaluate such an application.
The course has the following main objectives:
Students will know basic economic theories of asymmetric information in contractual relationships and can critically
Fact sheet version: 1.0 as of 01/13/2017, valid for Spring Semester 2017
Page 1 / 4
evaluate the assumptions of those theories.
Students can apply those economic theories to problems of employee selection and motivation.
Students understand the basic behavioral economic concepts of fairness and reciprocity and can apply those concepts to
problems of employee motivation.
Students understand empirical studies in personnel economics and can critically evaluate such studies.
Course structure
Weekly lectures with integrated exercises. The preliminary schedule is as follows:
Week 1: Background: asymmetric information and incomplete contracts
Week 2‑4: Adverse selection and recruiting mechanisms
Week 5‑7: Moral hazard and incentive contracts
Week 8‑9: Behavioral aspects of motivation and alternative incentive systems
Week 10: Policy focus
Week 11: Written exam
Course literature
The course will be based on chapters from the following two textbooks. Additional compulsory literature for each topic will be
assigned in class and will be available on StudyNet before each lecture.
Lazear, Edward P. and Michael Gibbs (2009). Personnel Economics in Practice. 2nd ed. Hoboken, N.J.: John Wiley & Sons. (or 3rd ed.,
2015)
Milgrom, Paul R. and John Roberts (1992). Economics, Organization, and Management. Englewood Cliffs, N.J.: Prentice‑Hall.
Additional course information
‑‑
Examination information
Examination sub part/s
1. Examination sub part (1/2)
Examination time and form
Decentral ‑ Group examination paper (all given the same grades) (40%)
Remark
2 problem sets completed in groups of 2‑3 students
Examination-aid rule
Term papers
Fact sheet version: 1.0 as of 01/13/2017, valid for Spring Semester 2017
Page 2 / 4
Term papers must be written without anyone elseʹs help and in accordance with the known quotation standards, and
they must contain a declaration of authorship.
The documentation of sources (quotations, bibliography) has to be done throughout and consistently in accordance with
the APA or MLA standards. The indications of the sources of information taken over verbatim or in paraphrase
(quotations) must be integrated into the text in accordance with the precepts of the applicable quotation standard, while
informative and bibliographical notes must be added as footnotes (recommendations and standards can be found, for
example, in METZGER, C. (2015), Lern‑ und Arbeitsstrategien (11th ed., 4th printing). Aarau: Sauerländer).
For any work written at the HSG, the indication of the page numbers both according to the MLA and the APA standard is
never optional.
Where there are no page numbers in sources, precise references must be provided in a different way: titles of chapters or
sections, section numbers, acts, scenes, verses, etc.
For papers in law, the legal standard is recommended (by way of example, cf. FORSTMOSER, P., OGOREK R. et SCHINDLER
B. (2014, Juristisches Arbeiten: Eine Anleitung für Studierende (5. Auflage), Zürich: Schulthess, or the recommendations of
the Law School).
Supplementary aids
‑‑
Examination languages
Question language: English
Answer language: English
2. Examination sub part (2/2)
Examination time and form
Decentral ‑ Written examination (60%, 60 mins.)
Remark
Final exam in class.
Examination-aid rule
Extended Closed Book
The use of aids is limited; any additional aids permitted are exhaustively listed under ʺSupplementary aidsʺ. Basically, the
following is applicable:
At such examinations, all the pocket calculators of the Texas Instruments TI‑30 series and mono‑ or bilingual dictionaries
(no subject‑specific dictionaries) without hand‑written notes are admissible. Any other pocket calculator models and any
electronic dictionaries are inadmissible.
In addition, any type of communication, as well as any electronic devices that can be programmed and are capable of
communication such as notebooks, tablets, PDAs, mobile telephones and others, are inadmissible.
Students are themselves responsible for the procurement of examination aids.
Supplementary aids
None.
Examination languages
Question language: English
Answer language: English
Examination content
The group examination paper will consist of two take‑home assignments which can be completed in small groups. Detailed
assignments and deadlines will be announced in class.
The written exam will cover the topics discussed in class (asymmetric information and incomplete contracts, adverse selection
and recruiting mechanisms, moral hazard and incentive contracts, behavioral aspects of motivation and alternative incentive
systems), as well as the assignments, the compulsory literature specified in the syllabus and the slides which will be posted on
StudyNet until 11.05.2017, 23:59. Additional literature mentioned in the syllabus is only covered on the exam to the extent
discussed in class.
Fact sheet version: 1.0 as of 01/13/2017, valid for Spring Semester 2017
Page 3 / 4
Examination relevant literature
‑ Compulsory literature specified in the syllabus
‑ Slides
‑ Assignments
All materials will be posted on StudyNet until 27.05.2016, 23:59.
Additional literature mentioned in the syllabus is only covered on the exam to the extent discussed in class.
Please note
We would like to point out to you that this fact sheet has absolute priority over other information such as StudyNet,
faculty members’ personal databases, information provided in lectures, etc.
When will the fact sheets become binding?
Information about courses and examination time (central/decentral and grading form): from the start of the bidding
process on 26 January 2017
Information about decentral examinations (examination‑aid rule, examination content, examination relevant
literature): after the 4th semester week on 20 March 2017
Information about central examinations (examination‑aid rule, examination content, examination relevant
literature): from the start of the enrolment period for the examinations on 10 April 2017
Please look at the fact sheet once more after these deadlines have expired.
Fact sheet version: 1.0 as of 01/13/2017, valid for Spring Semester 2017
Page 4 / 4