Managerial Economics
ECO 610
December 2012 Greece MBA program (UK-TEI)
Professor Christopher (Chris) Jepsen, University College Dublin and
University of Kentucky
E-mail: christopher.jepsen@ucd.ie
Class times: December 3 to December 13, 6pm to 10pm
Course description:
In this course we will apply economic theory to managerial decision making. We will
employ many of the traditional tools of microeconomics and see how they can be used to
analyze practical business problems. We will pay particular attention to the strategy of
firms in the marketplace. ECO 610 is a core course in the MBA program and is intended
to complement the other core courses. The course may well be of interest to students
outside the MBA program.
Prerequisites for this course are principles of micro and macroeconomics, basic
probability theory and statistics, and introductory calculus.
Required Readings:
The textbook for the class is Economics of Strategy, by David Besanko, David Dranove,
Mark Shanley, and Scott Schaefer, published by John Wiley and Sons.
Grading:
Your grade in the course will be based on your performance on (1) in-class group
homework assignments, (2) an in-class midterm exam on Monday, December 10, and (3)
an in-class final exam on Saturday, December 29th. The final exam will be
comprehensive, but greater weight will be placed on material not covered on the midterm
(i.e. covered December 7 to December 13). You will be able to use your textbook and
notes for the homework assignments and the exams. The group homework assignments
will count 30% in total, the midterm exam will count 30% in total, and the final exam
will count 40% towards the determination of your letter grade in the course.
Class Structure
Because this course is so compact and concentrated, we have to be very efficient in our
use of class time. Also, I recognize that most students will have already put in a full day
at work before coming to class. We will typically break each evening into three sessions.
In the first two sessions, from 6:00 p.m. until 7:15 and 7:30 to 8:45, I will discuss the
evening’s topic and provide some examples to motivate interest. After another fifteenminute break, we will finish off the evening with a group homework assignment, ending
class by 10:00 p.m.
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In addition to class time, I will try to make myself available for discussion and
consultation before class (5:00 – 6:00 PM) as well as during the breaks for class.
Class Schedule
Monday, December 3: Background and Economics of Scale and Scope (Horizontal
Boundaries)
Readings:
Economics of Strategy, chapter 1 (pages 9 to 34) and chapter 2
Tuesday, December 4: Make Versus Buy (Vertical Boundaries)
Readings:
Economics of Strategy, chapter 5
Wednesday, December 5: Incentives in Firms
Readings:
Economics of Strategy, chapter 16 (pages 488-506)
Thursday, December 6: Competitors and Competition
Readings:
Economics of Strategy, chapter 8 and pages 34-38
Friday, December 7: Strategic Commitment
Readings:
Economics of Strategy, chapter 9
Monday, December 10: Midterm examination
NOTES: You are allowed to use your notes and the textbook during the exam. The exam
covers Chapters 1, 2, 5, 8, and 16. (Chapter 9 is covered on the final exam.)
Tuesday, December 11: The Dynamics of Pricing Rivalry
Readings:
Economics of Strategy, chapter 10
Wednesday, December 12: Entry and Exit
Readings:
Economics of Strategy, chapter 11
Thursday, December 13: Industry Analysis
Readings:
Economics of Strategy, chapter 12
Saturday, December 29: In-class final exam
NOTE: You are allowed to use your notes and the textbook during the exam. The exam
covers the entire course, but more weight is given to material not covered on the
midterm (Chapters 9, 10, 11, and 12).
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