1) Identify the rational actor paradigm and show how it can be used to both identify why problems occur and what can be done to change behavior.
2) Recognize the key steps in solving problems is to bring it down to an individual decision level by asking three questions:
a) Who made the bad decision?
b) Did they have enough information to make a good decision?
c) Did they have the incentive to make a good decision?
3) Spot assets in lower valued uses and design policies to facilitate the movement of those assets to higher valued uses.
To be successful in responding to the discussion questions, you need to apply the module information to your postings as appropriate.
Discussion Question 1: When the incentives of employees are not aligned with the goals of the company what potential problems could be caused by goal misalignment ? Suggest strategies that would address those problems.
Discussion Question 2: Describe an investment decision a company can make. Outline the opportunity cost and benefit of the decision.
The assignment will be graded according the following rubric:
First and foremost how you have applied the course material to your discussion. In particular, your response should not be a generic business case analysis, rather it must draw the pertinent information and theory from the course material. (25%)
Overall quality, thoughtfulness, and rigor of your responses. Your writing should reflects your level of understanding the course material and the excellence that is expected from a graduate level course students. (25%)
Accuracy and organization of your writing in addition to spelling, grammar, sentence structure, punctuation, etc. (25%)
The appropriate length of your response. Your response should not exceed one page per discussion question. (25%)
Resources:
Textbook: Froeb, Luke M., Brian T. McCann, Mikhael Shor, and Michael R. Ward, Managerial Economics: A Problem Solving Approach, 5th Edition, 2018. Cengage Learning.
Managerial Econ Blog, http://www.managerialecon.com/
