Business Economics fin 41290

Business Economics FIN 41290

Room N 204: Friday 11.0-13.00 except *

Module Co-Ordinator: Patrick McNutt

www.patrickmcnutt.com and Follow @tuncnunc

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Textbooks

1. 
   Besanko, David et al (2013): Economics of Strategy 6^th Edition ISBN 978-1-118-31918-5 Wiley Publications
   

2. 
   McNutt, Patrick (2014): Decoding Strategy: Patterns and Predictions ISBN 978-1-259-07106-5 McGrawHill Publications
   

Complementary Readings from Harvard Business Review
1. ‘How to Fight a Price War’

by Rao, Bergen & Davis HBR Mar-Apr 2000
2. ‘Predicting Your Competitor’s Reaction’

By Coyne & Horn HBR April 2009
3. ‘End of Rational Economics’

By Dan Ariely HBR July-Aug 2009
4. ‘From Economic Man to Behavioural Economics’

By Justin Fox HBR May 2015.

First Assessment 40% Assignment

Second Assessment 60% 2 Hour Examination

Revision Week: (30 Nov – 4 Dec)

Exams Week: (7-18 December)

Synopsis: The Module will blend theory with practice by applying principles of economics and elements of non-cooperative game theory. Tools of analysis will be applied in real time to FTSE 100, Fortune 100 and S&P 500 companies. The Module is especially suitable for MBA participants who are looking for analytical tools with an everyday application. The value added is the provision of an alternative method of reasoning and understanding management decision making across a range of different issues. In particular, the Module focuses on strategic decision making and competitor interaction in a market setting, working from many of the game theoretic premises that underpin the microeconomics of individual behaviour.

Proposed Class Schedule 12 x 2 Hrs

Theme A: Introduction and Economics of Strategy
Lecture 1: 4 Sept: Market-as-a-Game & Player Type

McNutt Ch. 1&2 and Besanko Ch. 1&3

Lecture 2: 11 Sept: Prices, Demand & Threat in the Data

McNutt Ch.3 and Besanko Ch. 9 [pp294-319]

Lecture 3: 18 Sept: Strategy: Choosing the Right Game: Value Net & Co-opetition

McNutt Ch. 1&2 and Besanko Ch 8 [pp264-284]

Lecture 4: 25 Sept: Costs & Capacity I

McNutt Ch. 5 and Besanko Ch. 2&3

Theme B: Game Dimension: Bertrand & Cournot
*Lecture 5: 2 Oct: Costs & Capacity II

McNutt Ch. 5 and Besanko Ch. 2&3

*Lecture 6: 9 Oct: Entry Deterrence & Limit Pricing

McNutt Ch. 6 and Besanko Ch. 6

Lecture 7: 16 Oct: Games: Moves & Commitment

McNutt Ch. 6&7 and Besanko Ch. 7

[No class 23 Oct due to Global Network Week]
Theme C: Economics of Strategy & Nash Equilibria
Lecture 8: 30 Oct: Dark Strategy: Asymmetry & Belief

McNutt Ch. 7 and Besanko Ch. 7

Lecture 9: 6 Nov: Strategic Moves & Credibility I

McNutt Ch. 7&8 and Besanko Ch. 7

Lecture 10: 13 Nov: Strategic Moves & Credibility II

McNutt Ch. 7&8 and Besanko Ch. 7

Lecture 11: 20 Nov: Prisoners’ Dilemma, Repetition & Folk Theorem

McNutt Ch. 8&9 and Besanko Ch. 7

Lecture 12: 28 Nov: Maximin & Minimax Strategies and Unpredictability

McNutt Ch. 8&9 and Besanko Ch. 7