MANAGERIAL ECONOMICS (ECON400)
Emory University - Department of Economics
Fall 2012
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Instructor: Maria Arbatskaya
Office Address: Rich 329
Office Phone: (404) 727 2770
Email:
Meeting Room: White Hall 101
Meeting Time: TuTh 2:30PM - 3:45PM
Office Hours: Tuesday 10:00PM – 12:00PM;
Friday 2:00PM – 3:00PM, or by appointment
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Content
Managerial economics uses microeconomic theory to guide managerial decision-making. We will extensively use calculus and Excel to find the optimal strategies for managers. The course will cover such topics as pricing, price discrimination, game theory, entry deterrence, principal-agent model, advertising, bundling, and durable goods. We will also examine strategies for running and participating in an auction. Students will be responsible for completing several assignments in Excel.
Course Prerequisites
This course requires ECON 201 or equivalent transfer credit as a prerequisite.
Textbooks
Required: “Managerial Economics: A Strategic Approach,” by Timothy C. G. Fisher, David Prentice, and Robert Waschik, Second Edition, Routledge 2010. ISBN-10: 0415495091
Recommended: Jeffrey R. Church and Roger Ware. Industrial Organization: A Strategic Approach. New York: McGraw-Hill, 2000. Available at: http://works.bepress.com/jeffrey_church/23
Additional reading materials:
Students are also required to read materials posted on the Blackboard.
Grades
Midterm exam (30%), final exam (40%), homework assignments (20%), and participation (10%).
The Department of Economicsrecommendsthat faculty members adopt the following grade distribution:
A/A-not to exceed 35%
A through B- not to exceed 80%
C+ or belowat least 20%
The following grading scale provides guidance for determining the letter grade for the course:
91-100% = A 78-81% = B 65-69% = C 50-56% = D
86-90% = A- 75-77% = B- 60-64% = C- 0 - 49% = F
82-85% = B+ 70-74% = C+ 57-59% = D+
There will be no make-ups for the exams. If you have a University-excused absence for the mid-term exam, your final exam will be weighted more heavily to reflect the missing exam.
Blackboard
I will be using Blackboard to post materials for the class. These will include a copy of this syllabus, as well as announcements, assignments, additional reading, and other supplemental materials. You are responsible for checking the site regularly and downloading materials yourself, as most items will not be handed out in class.
Exam Dates
Midterm Exam will be held on Thursday, October 11, during the regular class time.
Final Exam will be held on Friday, December 14 between 8:30 A.M. - 11:00 A.M.
Course Policies
· You must always abide by the Honor Code. Academic dishonesty will not be tolerated. Do not cheat! The Honor Code for undergraduate students at Emory can be found online at: http://college.emory.edu/current/standards/honor_code.html. In particular, no books, notes or other materials are permitted at exams. Any student found cheating will receive a score of zero for that examination.
· If you have a documented disability, and will be requesting academic accommodation for this class, please me within 2 weeks of the classes.
· You are expected to attend all classes and to be in class on time.
· Only very simple calculators that can perform most basic functions are acceptable at the exams. Please make sure you have one.
Tips for Success
Read the appropriate chapter for general understanding before the lecture. After the lecture re-read the chapter thoroughly and review the material using lecture notes. Practice answering assigned questions and problems. Write down your thoughts and questions as soon as they arise. Ask questions and collaborate with your classmates.
I encourage you to see me as soon as possible if you have difficulty following a topic discussed in class. Do not miss lectures. You will find your lecture notes essential when preparing for exams and working on assignments.
Preliminary Outline of Topics Covered in the Course
It is assumed that you are familiar with microeconomics at the intermediate level.
Topic 1: Review the basics
1) Elasticity. Equilibrium in the S&D model.
· Read Chapter 1.
2) Monopoly and Perfect Competition. Costs.
· Read Chapters 2 and 3.
Topic 2: Price Discrimination
1) 1st, 2d, and 3d degree price discrimination
§ Read Chapter 4.
2) Advanced Topics in Price Discrimination
b) Bundling
· Read Chapter 16
c) Pricing of Durable goods
· Read Chapter 17.
d) Auctions
· Read Chapter 18.
Topic 3: Game Theory and Duopoly models
1) Game Theory
· Read Chapter 5.
2) Duopoly models
· Read Chapter 6.
3) Entry Deterrence
· Read Chapter 8.
4) Horizontal and Vertical Integration
· Read Chapter 10.
Topic 4: Labor market and incentives. Solving the Principal-Agent model.
· Read Chapters 2, 11, and 12.
Topic 5: Information and Advertising.
· Read Chapters 14 and 15.
Textbook’s Table of Contents
Chapter 1. Introduction, 1
Part PART I. Theory, 11
Chapter 2. The manager and the firm, 13
Chapter 3. Monopoly and perfect competition, 22
Chapter 4. Price discrimination, 44
Chapter 5. Game theory, 65
Part PART II. Strategic interaction between firms, 85
Chapter 6. Strategy in a market with two firms, 87
Chapter 7. Product differentiation, 112
Chapter 8. Entry deterrence and accommodation, 139
Chapter 9. Government regulation of industries, 165
Part PART III. Strategic interaction within firms, 189
Chapter 10. Vertical and horizontal integration, 191
Chapter 11. Labour markets, 211
Chapter 12. Training and motivating workers, 228
Chapter 13. Trade unions, 249
Part PART IV. Marketing economics, 269
Chapter 14. The role of information, 271
Chapter 15. Advertising, 286
Chapter 16. Bundling, 311
Chapter 17. Durable goods, 323
Chapter 18. Auctions, 335
Chapter 19. The product life cycle, 345
Answers to odd-numbered problems, 367
Index, 383
I welcome your comments and suggestions for improving this class. Speak with me in person, send me an email, or leave a note in my mailbox in the economics department. Thank you!
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