Economic Analysis for Business Decisions
Course facts
- Payment: Free, no certificate
- Credits: Non Credit
- Learning style: Self-paced, start anytime
- Resources: Exam Solutions; Exams; Lecture Notes; Problem Set Solutions; Problem Sets
MIT OpenCourseWare details
- As taught in: Fall 2004
- Department: Sloan School of Management
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Applied microeconomics for managers: cost, demand, pricing, game theory, auctions and incentives, with homework and many past exams.
Managers need working tools for the economic decisions firms make every day, and this core business school class supplies them. It covers market definition, cost, demand and market power, then price discrimination, game theory and collusion. It also treats auctions, transfer pricing, incentives and asymmetric information. Homework comes with notes on common mistakes, and exams from several years include solutions.
What You Will Achieve
- Analyze costs, including fixed, sunk and marginal costs
- Set prices using demand, market power and discrimination
- Use game theory to think about competitive strategy
- Design incentives and transfer prices within a firm
Program Overview
Markets and Costs
The first lectures define the basics.
- Defining the market
- Analysis of competitive markets
- Production and cost
- Consumer demand
Market Power and Strategy
The middle lectures consider competition.
- Pricing with market power
- Game theory and competitive strategy
- Collusion and competition
Firms and Information
The last lectures look inside organizations.
- Auctions and bidding
- Transfer pricing and vertical integration
- Incentives and information
- Externalities and market structure
Course Completion
Job Outlook
These tools help managers, consultants and analysts who make pricing, investment and strategy decisions in firms.
Good for: MBA students and managers who want practical microeconomics for business decisions.
Keep in mind: The lectures assume you will use Pindyck and Rubinfeld’s textbook, and the course reader is not included. Case discussions cannot be repeated, and its examples are mostly from the early 2000s.
Bottom line: An applied microeconomics course, with a large and useful stock of solved exams.
Frequently Asked Questions
Which exams can I practice with?
Midterm and final exams from 1999 onward, with solutions. The syllabus notes that exams contain problems very similar to homework problems.
What is special about the homework files?
Some homework sets have a common mistakes file, in addition to solutions, showing where students went wrong.
Which textbook is used?
Microeconomics by Robert Pindyck and Daniel Rubinfeld, 5th edition, with other readings in a course reader.
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