Economics of Management Strategy
This module will focus on the central concepts of theory of firm and industrial organization. The first part of the module focuses on theory of firm and design of organization within the firm, while the second part focuses on competition between firms and market outcomes.
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.
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.
All of the resources for this module are available on the ELE (Exeter Learning Environment).
Full module specification
|Module title:||Economics of Management Strategy|
BEE2024 or BEE2025
|Duration of module:||
Duration (weeks) - term 1: |
11Duration (weeks) - term 2:
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 and discuss asymmetry of information in interaction between agents and discuss implication for organization design.
- 2. undertand how and why signalling may occur.
- 3. explain and discuss transaction costs and it can lead to different kind of contracts.
- 4. explain and understand rent-seeking contests
- 5. describe the different forms of contract design;
- 6. understand the hold up problem and why it exists when contracts are incomplete
- 7. understand delegation of authority
- 8. understand when there should be a vertical design versus horizontal design of organisations
- 9. Explain and analyse double marginalisation in vertical markets
- 10. understand the role of credibility in strategic situations; analyse market structures
- 11. analysze and understand firms competing with each other by choosing quantity or prices;
- 12. analyse pricing strategies;
- 13. analyse capacity plans;
- 14. analyse a research and development plan;
- 15. assess the potential profitability of an innovation strategy
- 16. evaluate methods of deterring entry;
ILO: Discipline-specific skills
- 17. apply strategic reasoning to recommend courses of action in simple situations;
- 18. apply information economics to understand theory of firm.
ILO: Personal and key skills
- 19. demonstrate written communication skills;
- 20. demonstrate problem solving skills;
- 21. demonstrate group working skills.
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Contact hours||20||Group Work hours|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Feedback during revision sessions||60 minutes||1-21||Oral/online|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Final Exam||70||3 hours||1-20||Written Feedback|
|Assignment 1||15||1 essay/ 2 numerical||1- 6, 16-18||Answers posted online|
|Online Tests||15||online tests with numerical problems. The tests will be every two weeks in term 2.||7-18||Scores and solutions will be posted online.|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|Assignments 1 & online tests||Assignment (30%)||1-21||August Examination Period|
|Final Exam||Final Exam 3 hours (70%)||1-20||August Examination Period|
1) Adverse selection and asymmetry of information.
2) Risk and incentive.
3) Moral hazard.
4) Incomplete contracts and hold-up.
5) Authority and delegation.
7) Team production.
8) Market structures.
9) Quantity and price competition.
10) Entry Deterrence.
11) Investment and innovation.
12) R and D races.
13) Pricing strategies.
Indicative learning resources - Basic reading
Besanko D. et al., (2013) Economics of Strategy Wiley. 6th Edition
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?
Last revision date