This is an archived course. A more recent version may be available at ocw.mit.edu.

Recitations

These recitations are courtesy of Jin Li. Used with permission.

RECITATIONS Topics
Moral hazard and observability (PDF)

Motivation

Formulation

Solution

Deductibles on insurance

Sufficient statistics theorem
Basics of dynamic programming (PDF)

Two formulations of the problem

Some theoretical results

Basic equations for the 1-D case

From discrete time to continuous time
The tenuous trade-off between risk and incentives (PDF)

Model setup

Analysis
Employer learning and statistical determination (PDF)

Setup

Firms' learning

Properties of the regression

Empirical implications

Data and results
Directed technology change (PDF)

Very basics

Model setup

Equilibrium characterization

Discussion
Hierarchies and the organization of knowledge in production (PDF)

Motivation

Model basics

Communication and organization

Some general results

Technological change and organizational design: An example

Extensions