Course Outline for Managerial Economics
International MBA Program
National Cheng Kung University
Taipei, Summer 2011
Instructor: Alan J. Webb
Email: ajwebb@mail.ncku.edu.tw or awebb@pc.jaring.my or
Office hours: By appointment .
Main Text: Managerial Economics: A Problem-Solving Approach, Luke M. Froeb and
Brian T. McCann. South-Western Cengage Learning 2010
Supplemental Texts:
Managerial Economics, Theory Applications and Cases, Edwin Mansfield, W.
Bruce Allen, Neil A. Doherty and Keith Weigelt. WW Norton & Co. 2002.
Economics for Managers, James R. McGuigan, R. Charles Moyer and Frederick
H. deB. Harris. Thompson South-Western. 11th Edition. 2008.
Podcasts:
Planet Money Podcasts
http://www.npr.org/rss/podcast/podcast_detail.php?siteId=94411890
The Global Economy
http://www.npr.org/rss/podcast/podcast_detail.php?siteId=102779701
Knowledge @ Wharton
http://knowledge.wharton.upenn.edu/podcast_archive.cfm
Class 1, Sunday, July 10 The Scope of and Philosophy of Managerial Economics
SESSION 1:
Review of Course
Introduction of students
Froeb & McCann: Chap 1: Introduction to the text and the course,
SESSION 2
Froeb & McCann. Chapter 2;The One Lesson of Business
Supplemental Material:
Wharton Article: Value Destruction: The Cost to Companies That Engage
in Deceptive Marketing
Planet Money: #188 Tomatoes, Tradition and the Global Economy
(6/23/2010)
Also, Mansfield et. al.: Chap2. Optimization Techniques
Class 2, Sunday, July 17, Costs & How Much Decisions
SESSION 1:
 Froeb & McCann: Chapter 3: Benefits, Costs and Decisions
Also:
McGuigan et.al., Chapter 3: Demand Analysis
Mansfield et. al.: Chap.3 & 4. Consumer Behavior and Rational Choice
Economic Organization of a POW Camp
1
SESSION 2
 Froeb & McCann, Chapter 4: Extend (How Much) Decisions
Class 3, Sunday, July 24, Investment Decisions and Simple Pricing
SESSION 1:
 Froeb & McCann, Chapter 5: Investment Decisions: Looking Ahead and
Reason Back
SESSION 2
 Froeb & McCann, Chapter 6: Simple Pricing
Class 4, Sunday, July 31, Understanding Markets
SESSION 1: Economies of Scale and Scope
 Froeb & McCann, Chapter 7: Economies of Scale and Scope
SESSION 2: Markets and Industry Changes
 Froeb & McCann, Chapter 8: Understanding Markets and Industry
Changes
Review how to translate S&D into empirical estimation. Key concepts.
McGuigan et.al., Chapter 4: Estimating Demand
Mansfield et. al.: Chap. 5. Estimating Demand Functions
McGuigan et.al., Appendix 4A, Problems in Applying the Linear Regression
Model
MAJOR HW ASSIGNMENT.
Give different groups data. Have them estimate demand functions. Present
results.
Class 5, Sunday, August 7, Economic Forecasting
SESSION 1:
 Froeb & McCann, Chapter 9: Relationships between Industries: The
Forces Moving us Toward Long-Run Equilibrium
Economic Forecasting
Also:
McGuigan et.al., Chapter 5: Business and Economic Forecasting
Mansfield et. al.: Chap. 6. Business and Economic Forecasting
SESSION 2:
HW Assignment Presentations
Class 6, Sunday, August 14 Pricing for Greater Profit
 Froeb & McCann, Chapters 12~14:
o Chap. 12 (More Realistic and Complex Pricing),
o Chap. 13 (Direct Price Discrimination),
o Chap 14 (Indirect Price Discrimination)
Also
Mansfield et. al., Chapter 13: Pricing Techniques
2
McGuigan et.al., Chapter 14: Pricing Techniques and Analysis
Class 7, Sunday, August 21, Uncertainty
 Froeb & McCann, Chapters 17 & 18
o Chap. 17: Making Decisions with Uncertainty
o Chap. 18: Auctions
Mansfield et.al.: Chap 14. Risk, Uncertainty and Incentives
SESSION 2:
 Froeb & McCann, Chapters 19 & 20
o Chap. 19: The Problem of Adverse Selection
o Chap. 20: The Problem of Moral Hazard
Also
Mansfield et.al.: Chap 16. Managing Incentives: Principal-Agent Problems and
Moral Hazard.
Class 8, Sunday, August 28, Organizational Design
 Froeb & McCann, Chapters 21~23
o Chap 21: Getting Employees to work in the Firm’s Best Interests
o Chap. 22: Getting Divisions to work in the Firm’s Best Interests
o Chap. 23: Managing Vertical Relationships
SESSION 2:
Presentations
Class 9, Sunday, September 4th
FINAL
Grade:
Homework:
Midterm Project:
Final:
Project:
Of which:
Presentation:
Written rpt:
Class Participation:
15%
25%
25%
20%
10%
10%
15%
3