Economics of Management Strategy

Module description

Summary:

This module will focus on managerial decision making, the central concepts of theory of firm and industrial organization.  The first part of the module focuses on the basics of managerial decision making and the design of organization within the firm, while the second part focuses on competition between firms and market outcomes.

Additional Information:

Internationalisation

Due to the nature of the topics included in this module you will have the opportunity to examine both domestic and international cases.  Fundamentally, this module provides an application of economics methods to issues of management strategy and is, therefore, relevant in many countries.

Employability

Further, the understanding of management and the organisation of firms which you will acquire in this module is directly transferable to employment.  This module will also equip you with skills in written communication, problem-solving, and group-working.

Sustainability

All of the resources for this module are available on the ELE (Exeter Learning Environment).

Full module specification

Module title:Economics of Management Strategy
Module code:BEE3027
Module level:3
Academic year:2017/8
Module lecturers:
  • Dr Luke Lindsay - Lecturer
  • Dr Cecilia Chen - Lecturer
Module credit:30
ECTS value:

15

Pre-requisites:

BEE2024 or BEE2025

This module cannot be taken by BSc/BA Economics students.

Co-requisites:

None

Duration of module: Duration (weeks) - term 1:

11

Duration (weeks) - term 2:

11

Module aims

The module is compulsory for the final year of SH Business Economics and an option for other final years undergraduates. Fundamentally, it provides an application of economics methods to issues of management strategy. This module will focus on the central concepts of strategic interaction. The first part of the module focuses on theory of firm and design of organization within the firm, while the second part focuses on completion between firms and market outcomes. 

ILO: Module-specific skills

  • 1. explain the anatomy of managerial decision making and the bounds of human attention and rationality.
  • 2. introduce some important judgemental heuristics
  • 3. explain and discuss overconfidence in decision making and other common biases and the impact of these biases on management decision making
  • 4. explain and understand transaction utility and consumer pricing
  • 5. explain and understand bounded awareness, framing and the reversal of preferences, status quo bias and default options
  • 6. understand the motivational and emotional influences on decision making
  • 7. understand fairness and ethics in decision making
  • 8. understand decisions under risk and uncertainty
  • 9. explain and analyse models of procrastination and commitment
  • 10. understand theoretical models of firm behaviour and market organization
  • 11. use quantitative methods to analyse firm behaviour
  • 12. apply economic theory in case studies
  • 13. evaluate the insights alternative theoretical models offer in case studies
  • 14. formulate strategies for firms to follow

ILO: Discipline-specific skills

  • 15. apply strategic reasoning to recommend courses of action in simple situations
  • 16. apply the insights from the course to managerial decision making

ILO: Personal and key skills

  • 17. demonstrate written communication skills
  • 18. demonstrate problem solving skills
  • 19. demonstrate group working skills

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad
902100

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Contact hours70Lectures
Contact hours20Group Work hours

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Term 1: Short essays questions15 minutes each and 4-5 questions in total1-9, 15-19Oral

Summative assessment (% of credit)

CourseworkWritten examsPractical exams
30700

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
January Exam351.5 hours1-9, 15-19Written Feedback
Assignment 1 (term 1)151-9, 15-19Written feedback
Online Tests15Online tests with numerical problems. The tests will be every two weeks in term 2.10-11Scores and solutions will be posted online
May Exam351.5 hours10, 12-19

Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
Term 1 exam (35%) and assessment (15%)Exam 1.5 hours (50%)1-9, 15-19August Examination Period
Term 2 exam (35%) and online tests (15%)Exam 1.5 hours (50%)10-19August Examination Period

Re-assessment notes

If student fails the module but passed one of the terms, only the assessment for the term failed needs to be retaken.

Syllabus plan

Term 1

  • Overconfidence and other common biases.
  • Transaction utility and consumer pricing. 
  • Mental accounting, framing and reversal of preferences.
  • Status quo bias and default options.
  • Motivational and emotional influences on decision making.
  • Fairness and ethics in decision making.
  • Decision under risk and uncertainty.
  • Naïve procrastination and commitments.

Term 2 will cover selected topics in Industrial Organisation.  Material will mostly be drawn from chapters in Carlton & Perloff as well as some other sources.  The main topics covered will be as follows:

  • Costs (e.g. cost minimisation, different optimisation techniques)
  • Market Structure (e.g. different types of competition, product differentiation)
  • Strategies and conduct (e.g. price discrimination, bundling, entry deterrence)
  • Information and advertising
  • Dynamic models (e.g. selling durable goods, research and development)

Indicative learning resources - Basic reading

  • Bazerman, M and Moore, D (2012) Judgement in Managerial Decision Making (8th edition), Wiley
  • Just, D (2013) Introduction to Behavioural Economics (1st edition), Wiley
  • Carlton, D. W. and Perloff, J. M. (2015) Modern Industrial Organization (4th Global Edition), Pearson

Other references to books and articles will be given from time to time.

Module has an active ELE page?

Yes

Origin date

01/09/2004

Last revision date

14/08/2017