Prerequisites Deliverables and Grades Class Participation 10%Group work 30% Exams and re-gradingYou are responsible for checking the exam dates and avoid any conflict with other commitments. During exams, you are not allowed to consult class notes, books, or any other material. However, you may consult one page of notes (a standard-size sheet of paper written on two sides). Questions about grading must be made in writing and no more than a week after the exams are returned.Honor Code Help There are times when a little help can get you past an obstacle. If you are stuck, send me an email ([email protected]) or stop by my office (KMC 7th floor, room 78). I try to respond quickly to email. My office hours for the Spring will tentatively be scheduled for Monday 5-6pm and Thursday 5-6pm, but if these don’t work for you, feel free to email me and set up an alternate time. I will provide you with contact details for the teaching assistant at the start of the course.All announcements regarding the course will be made on Blackboard. Besides administrative issues, I could post clarifications on the class material (arising out of our discussion in class or following from a fellow student’s questions). You are responsible for checking Blackboard for announcements on a regular basis (i.e. at least a couple of times a week).Syllabus and Outline 1 Firms and Markets (Spring 2010) [B01.1303.00 and B01.1303.0P] PRELIMINARY SYLLABUS AND OUTLINE Course Description The goal of this course is to give you some insight into how markets work. The first part of the course starts with the study of decision making by consumers and firms and concludes with a fundamental result in economics: a set of conditions under which markets function efficiently. In the second part of the course, we focus on situations when, for one reason or another, markets don’t work efficiently. We will emphasize the importance of strategic behavior, as modeled by game theory. Microeconomics (as the topic of this course is frequently referred to) is an important component of an MBA program. First, microeconomics focuses on specific dimensions of optimal firm decision making, such as pricing and entry and exit. Second, the formal economics perspective on business plays an important role in other areas of MBA study, such as finance or marketing. Finally, by studying public policy towards market failures, microeconomics highlights important factors conditioning firm strategy. Some of the key concepts we will introduce include economic incentives, marginal analysis, opportunity cost (which costs matter), market efficiency (what does it mean for a market to work), strategic behavior (how to predict and respond to your rivals’ decisions), and asymmetric information (what happens when others know something you do not). Our experience with students in prior years is that much of this is intuitive. But much is not, and our hope is that the combination of theoretical structure and practical examples will be useful in the years to come. It will not make you a success on its own, but it might give you an edge a few times when it matters. Firms and Markets Professor Robin Lee Office: KMC 7-78 Telephone: (212) 998-0479 Email: [email protected] and Outline 2 Prerequisites You are expected to be comfortable with basic algebra and calculus, including systems of equations, logarithms and NPV calculations, and derivatives. Course Materials • Lecture notes. They review the theory relevant to most classes. In a few pages, they outline and explain the conceptual issues for the day, define terms, give examples, and (where it makes sense) work through numerical problems. They are intended to complement the lectures rather than substitute for them • Textbook. I require Michael Baye’s Managerial Economics and Business Strategy (McGraw-Hill, 6th or 7th edition), which is available in the bookstore. There is also a study guide to accompany the text. Most students indicate that they find this book helpful. I also want to draw your attention to Managerial Economics by Samuelson and Marks (Wiley, 4th or 5th edition). This is a good auxiliary text for the course – it is a little more advanced in some parts, but is a little more comprehensive and is sensible on how to take concepts to data. • Slides. The slides are a forecast of where the class will head, but if the discussion moves in another interesting direction we will generally let it run its own course. Also, I will amend the slides from time-to-time to keep the course up-to-date with current research and events. I will use blackboard to post the most up-to-date slides. I will also endeavor to post copies of all the board-work I do in class. With the exception of the text, all of this material will be handed out the first day of class and posted on the course management system (http://sternclasses.nyu.edu). Deliverables and Grades The various “deliverables” in the course are designed to develop different skills: • Class participation. It is important to integrate what you learn and be able to express it effectively. Moreover, there is a great deal of collective insight and experience in the class and we all benefit from sharing it. It will be based on such measures as the quality of your contributions, attendance, punctuality, and whether you are doing the problem sets, in addition to your overall citizenship in class. • Individual problem sets. Problem sets emphasize quantitative applications of the principles and tools developed in class. They are due at the start of class. They will not be graded, but will be marked with a check (and possibly a plus or minus). Making aSyllabus and Outline 3 bona fide attempt at problem sets will contribute to your participation grade; failure to submit or make a reasonable attempt may be penalized. Most of the problems are quantitative; some require a qualitative answer (the latter typically refer to mini-cases that my colleagues and I have written over the years) and for these there may be no definitive right or wrong: it is understanding the issues that is key. The problems marked “challenge problems” are harder than most and need not be perfect to get a check. Finally, your performance on problem sets will serve as a tiebreaker if you are on the border between two grades. • Group projects. Generally more complex and realistic quantitative