Columbia University Graduate School of Business EMBA Fall 2004 Managerial Economics B7006 Course Content This is an introductory course in the application of microeconomics to business decision making Although prior experience with economics is neither presumed nor required many of the students may have studied some of this material during their undergraduate careers This course covers the broad principles of microeconomics which underlie and or affect all business decisions The topics falling under this definition include the logic of decision making encompassing both 1 marginal analysis and 2 the structure of decision problems 3 the implications of these and other principles of decision making for the evaluation of a range of market environments e g competitive monopolistic and monopolistically competitive markets and 4 the logical structure and implications of strategic interactions among firms i e game theory In each of these areas the emphasis will be on applied business decision making Course Structure Outlined below are topics for each class session and corresponding readings from Pidyck Rubinfeld Microeconomics 6th edition referred to as P R The readings do not fully cover the material as it will be presented in most classes They should therefore be regarded as a supplement to not a substitute for class attendance and case preparation The emphasis in the course is on understanding and being able to apply effectively in business a relatively small number of general principles Therefore the important benchmarks of progress are case preparations and discussions Grades in the course will be based on homework problem sets and online games class participation a midterm exam and a final exam The weights on each of these elements are roughly 15 for the homework 15 for class participation 25 for the midterm and 45 for the final exam If however your midterm grade relative to the class mean is below your final exam grade relative to the class mean it will count for only 15 and the final 55 Individual Class Sessions Assignment Readings P R Introduction Firm Goals Individual Decision Making Individual Decision Making 213 225 TV Listings Magazines Inc Assignment 1 Piggy Bank Case 1 Cost Analysis Optimal Output Decision 262 273 Structure of Decision Making Decision Trees Assignment 2 153 159 168 170 Analysis of Competitive Markets Short Run Part I 273 281 Analysis of Competitive Markets Short Run Part II AMAX and the Molybdenum Industry Competitive Markets in the Long Run Imperfect Competition in the Short Run I Imperfect Competition in the Short Run II Price Discrimination II E Conomics Imperfect Competition in the Long Run Barriers to Entry 436 441 Individual Business and Society Tradeoffs Choices and Accountability Strategic Interaction among Firms Game Theory 473 502 441 447 Assignment 7 Assignment 3 Assignment 4 Case 2 281 294 339 364 Assignment 5 382 397 Assignment 6 Cls Topics Residence Week 9 8 9 11 Wednesday 9 8 1 2 Friday 9 10 3 4 Saturday 9 11 5 6 Fridays Saturdays on Campus September 24 7 8 October 8 9 10 October 22 11 12 October 23 13 14 Midterm Take Home November 5 15 16 Price Discrimination I Game Theory II Game Theory III Auctions and the Internet Assignment 8 614 626 Strategic Interaction with Asymmetric Information November 19 17 18 November 20 19 20 December 4 21 22 Final Exam December 17 Assignments are due at the beginning of the class in which they are listed For example assignment 1 and case 1 are due at the beginning of our second meeting class 3 Review and Conclusions Cascade Airlines 503 510 Case 4