Prereq: 14.01. Provides a rigorous, but not overly technical introduction to the economic theory of incentives and organization together with a varying set of applications. These include, among others, the optimal design of sales and CEO incentive schemes; the impact of incentives on risk taking and innovation; tournament design; the analysis of venture capital and other forms of financial incentive contracts; relational and behavioral aspects of incentive contracts; and various organizational design problems. Students taking graduate version complete additional assignments. Limited to 60. Final examination.