Writing rules to incentivize people
Short introduction: A mini-course on how to write contracts to make employees exert effort at the workplace.
In his Nobel Prize lecture, economist Bengt Holmstrom mentioned that it gets harder for companies to manage their workers, who can now run startups from smartphones while shirking their jobs. Selecting and incentivizing employees is a ubiquitous problem in management. This course analyzes tools such as bonus contracts and tournaments that help bosses to motivate workers and shareholders to control the top managers. We will discuss what makes these approaches work and what the data says about their performance.