Up

Objective: The objective of this course is to familiarize MBA students with the basic analytical tools used by labor economists to study labor market processes and labor market outcomes. The essential purpose here is to expose business school students to both the neoclassical and the institutional approaches to the study of human resources and labor markets. The course is specifically designed and targeted for b-school students interested in effecting managerial change in their organizations in the context of globalization and rapid economic change. Consequently, the course stresses more on concepts, policy, and empirical procedures rather than on the intricacies of economic formalism.

Session Plan:

Session 1: Introduction to Course & A Primer on Empirical Method(s) / Reading: Borjas, Chapter 1

Session 2: Labor Supply 1 / Reading: Borjas, Chapter 2

Session 3: Labor Supply 2 / Reading: Borjas, Chapter 3

Session 4: Labor Demand / Reading: Borjas, Chapter 4

Session 5: Labor Market Equilibrium / Reading: Borjas, Chapter 5

Session 6: Group Presentation 1 / Reading: To be Assigned

Session 7: Human Capital 1 & 2 / Readings: Borjas, Chapters 7 & 8


Session 9: Economics of Discrimination / Reading: Borjas, Chapter 10




Session 13: Economics of Trade Unions / Reading: Borjas, Chapter 11

Session 14: Labor Market Contracts & Work Incentives / Reading: Borjas, Chapter 12


Session 16: Unemployment / Reading: Borjas, Chapter 13




Session 20: Group Presentation 10 / Reading: To be Assigned & Summing Up

Text: George Borjas, Labor Economics, 1996, McGraw-Hill International Edition

Articles to be Assigned for Group Presentation: These will be research papers typically published in journals which I will assign to a group of students as the course starts depending on how many students register. They will be put up on the course web.

Pedagogy

The course would be conducted through lectures, group presentations and discussions. Students are expected to read the assigned chapters prior to the lecture so that sufficient time is spent in class discussions. A comprehensive end-term (closed book) two-hour exam will be held comprising of material covered in class. The weight for this end-term will be 50% of the final grade. Another 30% of the final grade will be based on a midterm exam (again, closed book of 1.5 hours duration). Finally, 20% of the final grade will be based on class presentations.

Evaluation Method

Class Presentation = 20% Midterm Exam = 30% End term examination = 50%

5. Game Theory : Decisions and Games (EC-246)

EC 246: DECISIONS & GAMES

Arijit Sen

[This course is offered as a PGP II Elective and can only be taken for credit. The course will be

offered in one section; so the maximum seating capacity in the L3 Lecture Hall will constitute

the registration cap for the course.]

Decision Theory is a study of rational decision making in an exogenous environment where

the environments reaction to a decision-makers choice is insignificant. Game Theory extends

Decision Theory to study interactive decision-making in an endogenous environment where

multiple decision-makers respond to each others decisions. The course will present a systematic

introduction to the core ideas in Game Theory, and will study the applications of these ideas in

diverse strategic situations.

We shall focus on the following strategic scenarios: (a) competition vs. cooperation, (b) coordi-

nation and anti-coordination, (c) intentional and inadvertent information transmission, and

(d) winner-take-all contests. Game-equilibrium analysis will be applied to understand problems

in sustaining cooperation, making credible threats and promises, achieving coordination,

transmitting signals, and bidding in auctions. We shall conclude with a discussion on the

strategic aspects of bargaining and negotiations, focusing on the interplay between value-

creation and value-capture that is inherent in formulating business strategies.

Course Topics

1. DECISIONS, GAMES, AND EQUILIBRIA

Review of Decision Theory; From Decision Theory to Game Theory; Game Formulations;

Equilibrium in Static Games: Nash Equilibrium and Rationalizability; Equilibrium in

Dynamic Games: Subgame-perfect Nash Equilibrium and Backward & Forward Induction

2. COOPERATION DILEMMAS

Prisoners Dilemmas in Economic and Social Interactions; Strategic Substitutes and

Complements; Collective Action Problems; Commitment Moves and Meta-strategies to

mitigate Cooperation Dilemmas

3. COORDINATION AND ANTI-COORDINATION

Multiplicity and Non-existence of Pure-strategy Nash Equilibria in Games of Coordination

and Anti-coordination; Interpreting Mixed-strategy Nash Equilibria; Nash Equilibria as

Self-enforcing Agreements under Complete Information: Renegotiation-proof & Coalition-

proof Nash Equilibria and Correlated Equilibria

4. REPEATED AND DYNAMIC GAMES

Repeated Games and Sustenance of Tacit Collusion; Repeated Games and Fair

Coordination; Dynamic Games of Timing: Preemption, Concession, and Wars of Attrition

5. STRATEGIC INTERACTION UNDER ASYMMETRIC INFORMATION

Bayes-Nash & Perfect-Bayesian Equilibria in Games of Incomplete Information;

Reputation-building in Multi-stage Games; Wars of Attrition under Asymmetric

Information; Signalling Games: Belief-updating and Forward Induction Refinements

6. AUCTIONS AND CONTESTS

Bidding Strategies in Alternative Auction Formats; Interdependent Values and the Winners

Curse; Auction Design Issues; Rent-seeking, Patent Races, and other Contests

7. BARGAINING AND NEGOTIATIONS

Bilateral Bargaining: The Nash Solution and the Alternating-offers Game; Contract

Negotiations and the Hold-up Problem; Multilateral Bargaining and Coalition Formation

Basic Text Avinash Dixit, Susan Skeath, and David Reiley: Games of Strategy, 3rd edition

Bedside Books Thomas Schelling: The Strategy of Conflict; Avinash Dixit & Barry Nalebuff: The Art of Strategy; and Adam Brandenburger & Barry Nalebuff: Co-opetition

Course Pedagogy One way to teach a rigorous course in Game Theory is to take the formal

definitions theorems proofs approach. The current course will, in contrast, take a largely

intuitive approach, where game theoretic concepts will be introduced and analyzed through a

series of game examples. These examples will be presented in two ways. In some cases, a

Discussion Game will be posted in the CourseWeb before a lecture, and will then be studied in

class (it will help immensely if students ponder over the example before coming to class). In

other cases, a Game Experiment will be held in class, and the experimental outcomes will be

discussed in a subsequent lecture. Theoretical concepts and formal results will be developed

through these two kinds of Game Examples.

Information on in-class Game Experiments There will be periodic game experiment

sessions held in class (each session will be for about 15-20 minutes). The experiments will be

pen-and-paper experiments, where each student will play against the average strategy of a

rival group of students. Relative performance will determine individual score in an

experiment.

Course Evaluation Performance in the class experiments will constitute 15% of a students

course grade. Five experiment sessions will be held over the entire term, and a students four

best performances will count towards his/her course grade.

A 1.5 hour mid-term exam will constitute 35% of course grade, and a comprehensive 2 hour end-

term exam will constitute 50% of course grade.

For a student who misses the mid-term exam (for valid medical reasons), the end-term exam will

constitute 85% of the grade. If a student misses the end-term exam (for valid medical reasons),

he/she will have to appear for a make-up exam (and will suffer a grade drop).

6. INTERNATIONAL FINANCE (FI-224)

Course Coordinator : Prof. Dipankar Mitra

Criteria for restriction on Course registration: Registration Only on Credit Basis

Tentative Course Outline

1. Introduction need for Foreign Currency finance and broad sources of international finance

2. International financial markets Domestic (Home + Foreign), Eurocurrency and Foreign exchange markets Linkages, risks, costs and efficiencies, interactions, conditions, Euro Banking, International transfer of Funds mechanisms

3. Foreign exchange markets Participants, Value Dates, Quotation Systems, Comparing Quotations and their quality and information content, cross spot, forward and swap rates, Inter-relationships between foreign exchange and money markets, Interest Parity and covered Interest Arbitrage, swap transactions and arbitrage

4. Business Opportunities in treasury Management in banking, commercial and industrial businesses in both equilibrium and dis-equilibrium situations viz. Expected changes in Interest rates and, rolling over and getting out of an exchange position, creating forward markets, value of floats effective yields and costs, costs of foreign currency deposits, central bank intervention in foreign exchange markets and objectives, modus operandi etc., Management of opposing cash flows, Borrowing and Investing cash flows with and without Exchange positions, etc.

5. Analysis in depth of the various investments and markets for raising funds in the International Financial markets, strategies for shopping for finance in the International capital and money markets including parameters for choosing a funding option and their evaluation

6. Foreign currency exposure and Risk Concepts, Management policies and Strategies, classification, hedging instruments for implementing both active Internal and external strategies, etc.

Method of Evaluation: Mid Term = 40% & End-term = 60%

7. BANK MANAGEMENT (FI-242)

Course Name Bank Management Term PGP II Term V

Name of Instructor Course Prerequisites ( if any )

Restrictions on course registration

Objectives : The objective of the course is to acquaint students with the nuances of banking in the perspective of the recent changes in banking. The course would start with the discussion covering the importance of banking in the economy and then gradually take students to the different aspects of banking in the present day context.

Session Plan : Session Description

1 Comparison between Bank Balance Sheet and other business entities balance sheet . Uniqueness of the Bank Balance Sheet and its business operation. Risk associated with Financial Intermediary Due to highly

leveraged capital structure Measures adopted by the regulator to contain such risk- Building up of

ideas only. Discussion on Sub prime crisis from the above point of view;

Banking In Indian Concepts Three Phases Pre Nationalization , Post nationalization but pre liberalization ( 1991) , Post liberalization ( post

1991); Sources of Bank Funds Types of Liabilities

Deposits Type of deposits - Term Deposits , Demand Deposits , Readings : Bank Management Koch and Macdonald;

Handouts 2 Sources of Bank Funds Tier I and Tier II fund

Negotiable Deposits Features, Pricing and Present Trend in Indian Market and Global Market

Treasury Operation of Banks : Domestic and foreign treasury operation of bank with respect to the following instruments :

Call and Notice Money Features , Pricing and procedure for raising money through these products .

Raising funds by using the open market operation Procedures , Pricing and methodology of raising money through these products.

Raising Funds through refinance scheme- Types of refinance scheme available in the market, features of such refinance schemes, pricing and

present trend in Indian , European and United States Market.

Readings : Handouts

Up

Documents

Transcript of Up