UNIVERSITY OF CALIFORNIA HAAS SCHOOL OF BUSINESS MBA 201A—Economic Analysis for Business Decisions Fall 2009 Professor Catherine Wolfram Course Description The goal of this course is to teach you how to use the tools of microeconomics to understand your business environment. There are two ways in which microeconomics is useful to managers. First, it will help you understand markets. Since business is filled with markets-from product markets to input markets to labor markets to financial markets-this tool will be useful in many contexts. Second, an understanding of microeconomics in general and markets in particular can help you think systematically about managing your firm’s resources. This, in turn, will help you formulate strategic decisions to create and capture value. We will analyze many practical questions faced by managers, including: How should the presence of uncertainty affect my decision process? How should I account for costs in deciding whether or not to enter a market or how to price a product? What are the effects of different pricing strategies? We will use readings, in-class exercises and cases to equip you with the economic tools to manage for competitive advantage. Policies and Procedures Attendance and Preparation: Most of the topics we will cover in microeconomics are cumulative, meaning that new topics build on previous topics. As a result, you should avoid missing class if at all possible and you should do your best to keep up with the material. If you must miss class, you should arrange to copy a classmate’s notes. During several classes we will discuss cases. In order for you and your classmates to get the most out of the case discussion, it is essential that you prepare the case. Preparation means that you have read the case, that you have taken time to think about the discussion questions, and that you are prepared to discuss them thoughtfully in class. All five cases have quantitative components, so answering the discussion questions will require working through some numbers. If you come to class unprepared, please let me know before class starts. Textbook and Other Readings: There are two different types of readings for this course: textbook and cases/mini-cases. Textbook materials are drawn from both Managerial Economics by William F. Samuelson and Stephen G. Marks, 6th edition and from Lecture Notes for 201a, by Benjamin Hermalin.1 All readings besides the Samuelson and Marks textbook are contained in the course reader. As mentioned above, you are responsible for reading and preparing the cases before the class for which they are assigned. We will discuss the assigned newspaper articles as mini-cases, so you should read those ahead of time as well. The textbook readings are not required. They 1 If you find a used version of the 5th edition of Samuelson & Marks, I would be happy to provide a cross-walk between the assignments for this course and that text.MBA 201a Fall 2009—Prof. Wolfram Page 2 contain useful alternative presentations of class material. You may use them as a preview of what we will be discussing in an upcoming class, as a review after we have discussed the material in class, or not at all, as you see fit. Problem Sets and Sections: Homework problem sets will be posted on the course website, usually on Thursday, and answer sheets will be posted a week after they’re distributed. The Graduate Student Instructor (GSI) will hold optional sections on Friday where the problem set solutions will be discussed. The sections meet at 10-11:30AM for the blue cohort and 11:30AM-1:00PM for the gold cohort, both in room C210. Problem sets will not be graded. They are entirely discretionary, but they are very useful aids to learning the material and are likely to reflect very closely some of the material on the exams. I strongly recommend that you work on them before getting the answer sheets and that you go over the answer sheets to make sure that you understand each problem. Feel free to work on the problem sets in teams. Often trying to explain the material to someone else can either enhance your own grasp of it or point out holes in your understanding. Be wary, however, of allowing others’ understanding of the material to substitute for your own. Remember that on the exams, you’re on your own. Team Assignment: Much of the work of business takes place in teams. To enhance your experience with teams and with your classmates, you will be asked to write a short memo analyzing a company’s cost structure and pricing policies. Further details about the assignment are at the end of the syllabus. Exams and Grading: Grading will be based on exams and the team assignment. There will be two exams: a midterm exam on Friday, September 18th 10AM to noon (in Andersen Auditorium) and the final exam on Friday, October 16th 10AM to 1PM (in Andersen Auditorium). The final exam covers material from the entire course. Your grade for the course will be based on the higher of two possible averages: .2⋅Midterm+ .5⋅Final + .2⋅Team Assignment + .1⋅Class Participation or .7⋅Final + .2⋅Team Assignment + .1⋅Class Participation Note that the second average ignores the midterm exam score. The midterm affects your grade only if you do better on it than on the final. Key dates: Pricing Project Company Due Tuesday, September 8th Midterm Exam Friday, September 18th Pricing Project Due Tuesday, October 6thFinal Exam Friday, October 16thMBA 201a Fall 2009—Prof. Wolfram Page 3 How to do well in this class: (1) Keep up. The class will build momentum quickly and each lecture’s material will form the foundation for later material, so it is important that you feel comfortable with the material the week we cover it and that you do not fall behind. (2) Do the homework assignments. These provide an opportunity to practice using the material we’ve gone over in class and to sharpen your skills and understanding. You should work through them over the course of the week and then check your answers versus the posted answer keys. Contact Information and Course Website: Professor Catherine Wolfram Office: Faculty Building, Room F651 Phone: (510)-642-2588 [email protected] Office hours: By email appointment Graduate Student Instructor Sharat Raghavan Office: Faculty Building, Room F529 Phone: (510) 643-1416 [email protected] Office hours: By email appointment