Business Economics (BIM)

This course will develop student’s capacity for economic analysis and awareness of the insights for management. The focus of the course is on the principles of microeconomics relevant for managerial decision making and the limits of markets, including asymmetric information; monopolies; and ethical frontiers.

📚 Textbook

Evans, Anthony J., 2020 “Economics: A complete guide for business“, London Publishing Partnership

[S] Schotter, A., “Microeconomics: A Modern Approach” South Western (2008, International edition, approx. £60)

🗓️ Content
Topic Lecture content Textbook reading
1. Consumer theory 1a. Incentives Matter* (+)

Evans, A.J., Incentive design, December 2020

1b. Max U (+)

Evans, A.J., “Maximilian Untergrundbahn”, January 2018 

Instructions: Complete the assignment questions

[E] Ch. 1

[S] Ch. 2, 3, 4

2. Understanding demand 2a. Value creation* (+)

2b. Value creation activity

3. Practical supply decisions 3a. Understanding cost* (+)

3b. Cost curves* (+)

Evans, A.J., “La Marmotte”, January 2012

Instructions: Complete Exhibit 1 and provide suggestions for the two key decisions

[E] Ch. 2

[S] Ch. 8, 9, 10, 14

4. Real world markets 4a. Auctions (+)

Hild, M., Dwidevy, A., and Raj, A., 2004, “The Biggest Auction Ever: 3G Licensing in Western Europe”, Darden Business Publishing

Discussion question: What are the alternatives to auctions?

4b. Market Applications (+)

[E] Ch. 3

[S] Ch. 15, 21, 22

5. Limits to markets 5a. Markets in everything (+)

“I’ve got debts, please buy my kidneys” The Times September 27th 2009

Discussion question: What are some different ways in which we could allocate kidneys?

5b. Shortage DB

6. Asymmetric information 6a. Adverse selection (+)
Akerlof, G.A., (1970). “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism”. Quarterly Journal of Economics 84(3):488–500 (£)

6b. Signalling* (+)
Spence, M., (1973). “Job Market Signaling”. Quarterly Journal of Economics 87(3):355–374 (£)

[S] Ch. 23
7. Pricing strategy 7a. Price discrimination

Read the following Twitter thread

Instructions: Verify as much of the information in the case as possible

7b. Price discrimination DB* (+)

[E] Ch. 4
8. Competition policy and regulation 8a. Competition and the market process* (+)

8b. Capital theory* (+)

[E] Ch. 5, Ch. 6

[S] Ch. 19

🏅 Assessment