Prof Amil Dasgupta

Prof Ulf Axelson

This course is compulsory on the MRes/PhD in Finance. This course is available on the MRes/PhD in Economics. This course is not available as an outside option to students on other programmes. This course uses controlled access as part of the course selection process. For information on controlled access courses, including eligibility, application processes, deadlines, and departmental contact details, please refer to the Controlled Access Courses webpage.

All students on a programme listed above will be given a place. The course is not capped.

Please contact finance.teachingmanager@lse.ac.uk with any queries.

Assumed prior knowledge:

The course is designed for first-year PhD students in Finance. Familiarity with microeconomics and game theory at the level of standard first-year PhD coursework will be assumed and is necessary.

This course focuses on the theory of corporate finance. It is subdivided into two parts. The first part reviews some of the classical concepts in corporate finance, using tools from game theory and contract theory to study incentive and information problems at the level of the firm, and examines how financial contracts can be designed to mitigate these problems. This part of the course also considers how takeovers and ownership concentration can help to mitigate conflict of interests among insiders and investors in firms. The second part focuses on the theory of financial intermediation. This component first reviews classic theories of banking while also introducing students to recent developments in the field. The course then introduces students to asset managers as financial intermediaries, examining their role in financial markets and corporate governance.

30 hours of seminars in the Winter Term.

Readings will be mainly based on journal articles and working papers. Some useful reference textbooks: 

• Tirole, Jean, The Theory of Corporate Finance, 2006, Princeton University Press.
• Freixas, X. and Rochet, J.C., The Microeconomics of Banking, 1997, MIT Press.

Continuous assessment (100%).