Individual Decision Making and Motivation

In the centre of our discussion are systems in which several individuals interact with each other in order to achieve certain common goals. These individual decision makers are in some way connected with each other such that the coordination of their individual behaviour towards the common goal becomes essential. We follow the conceptual framework of institutional economics and discuss three different forms of coordination:

• First, market coordination where individual activities are coordinated via the price mechanism. Here we follow the basic microeconomic theory and discuss the functioning of market as well as different sorts of market failures.
• Second, interorganizational coordination where individual activities are coordinated by long-term contracts between autonomous partners. Here we follow the transaction cost theory and discuss several factors which determine the usefulness of this coordination mechanism.
• And third, hierarchical coordination where individual activities are coordinated by a central unit and coordination takes place via commands. Here we follow managerial economic theories and integrate the various coordination instruments used within firms into our analysis.

By the end of the course, you will advance your knowledge in different ways:

• Learning the influences of psychology and sociology will help you understand why and how people make decisions
• Answering questions regarding the respective last lecture will help you to reconsider the contents discussed in class
• Learning to write a research paper will help you to deal with a new topic and be useful for your BSc-thesis
• Learning to analyse an experimental paper will help you to critically analyse the underlying theories
• Learning how to design an experiment will be useful for identifying differences between theory and practice
• Learning to speak in front of others will be useful for your university and business career

Jost, Peter-J. (2014). The Economics of Motivation and Organization. Edward Elgar Publishing

Lecture
Presentation
Experiments

Your willingness to solve puzzles!

90