Economics for Managers
Schedule
Fall 2005


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Syllabus
Schedule
Lectures
Assignments

Date Topics to be covered Assignments
August 18

Supply and demand: theory
1. Course overview
2. Supply and demand basics
3. Elasticity

PR, 1, 2.1-2.5, 2.7, 4.3

Bob McTeer, "The Dismal Science? Hardly!" Wall Street Journal, June 4, 2003

August 25 Supply and demand: applications
1. Consumer and producer surplus
2. Price controls
3. Tariffs and quotas
4. Taxes and subsidies

PR, 4.4, 4.6, 9.1-9.3, 9.5, 9.6, 16.5 (skip Figure 16.12 and associated text)

Neil King, Jr., "Errant Shot? So Far, Steel Tariffs Do Little of What President Envisioned," Wall Street Journal, Sept. 13, 2002
Roger Thurow, "Bittersweet: How an Addiction to Sugar Hurts Development," Wall Street Journal, September 16, 2002

September 1 Productivity
1. Decisions about inputs
2. Agency theory
3. Rewarding employees and executives
Problem Set 1 due

PR, 6.1-6.4 (skip material using isoquants), 17.4, 17.6

HBS, "Merck & Co., Inc. (A)"

September 8 Cost

1. Opportunity cost
2. Cost measurement
3. Economies of scale and scope
4. Learning curves

PR, 7.1, 7.2, 7.4-7.7, 15.1-15.2

HBS, "Relevant Costs and Revenues"

Dan Seligman, "Of Mice and Economics," Forbes, Aug. 24, 1998

Thomas Friedman, "It's A Flat World, After All," New York Times Magazine, April 3, 2005

September 15

Competitive markets
1. Profit maximization
2. Perfect competition

Problem Set 2 due

PR, ch. 8.1-8.8

Marakon Associates, "Beyond Performance Measurement: The Use and Misuse of Economic Profit," August 1994

September 22

Social responsibility
1. Externality theory
2. Impact on business

PR, ch. 18.1-18.2

HBS, "Global Climate Change After Marrackech (A)"

Marc Gunther, "Tree Huggers, Soy Lovers, and Profits," Fortune, June 23, 2003

Cait Murphy, "Hog Wild for Pollution Trading," Fortune, Sept. 2, 2002

Milton Friedman, "The Social Responsibility of Business Is to Increase its Profits," New York Times Magazine, September 13, 1970

September 26   Problem Set 3 due 5 pm
September 29 MIDTERM EXAM  
October 6 FALL BREAK

 

October 13 Market power
1. Monopoly
2. Antitrust

PR, 10.1-10.4, 10.7

Peter Huber, "Antitrust's Real Legacy," Wall Street Journal, December 26, 2002

October 20 Pricing
1. Microsoft case
2. Price discrimination

PR, ch. 11.1-11.3

HBS, "Competition Policy in the European Union and the Power of Microsoft"

John Graham, "Canada's Mail-Order Drug Houses Plague Glaxo," Wall Street Journal, Feb. 28, 2003

October 27

Market power and pricing: applications
1. Bundling
2. Creating entry barriers

Problem Set 4 due

PR, 11.5

HBS, "Note on the Structural Analysis of Industries"
HBS, "Coca-Cola's New Vending Machine (A)"

November 3

Game theory and strategy
1. Nash equilibrium
2. Repeated games
3. Sequential games
4. Entry deterrence

University of Hong Kong, "The Airline Industry and the World Trade Center Disaster"

PR, 12.4-12.6, 13.1-13.7
H. Courtney, "Games Managers Should Play," World Economic Affairs, Autumn 1997

HBS, "Beauregard Textiles"

November 10 CEO Summit  
November 17

Inside the firm
1. Why are there firms?
2. Organizational boundaries
3. Technology and production

Group presentations

 

HBS, "Market Failures"
HBS, "Coming Soon: A Theater Near You"

 

November 24 THANKSGIVING  
November 28   Problem Set 5 due 5 pm
December 1

Competition in high-tech industries

Group presentations

Carl Shapiro and Hal Varian, "Versioning," Harvard Business Review, November-December 1998

December 8

FINAL EXAM, 6-9 pm

 
December 12   Project writeup due 5pm