Economics of Management Strategy
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.
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
This module cannot be taken by BSc/BA Economics students.
|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 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 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|
|Term 1: Short essays questions||15 minutes each and 4-5 questions in total||1-9, 15-19||Oral|
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|
|January Exam||35||1.5 hours||1-9, 15-19||Written Feedback|
|Assignment 1 (term 1)||15||1-9, 15-19||Written feedback|
|Online Tests||15||Online tests with numerical problems. The tests will be every two weeks in term 2.||10-11||Scores and solutions will be posted online|
|May Exam||35||1.5 hours||10, 12-19|
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|
|Term 1 exam (35%) and assessment (15%)||Exam 1.5 hours (50%)||1-9, 15-19||August Examination Period|
|Term 2 exam (35%) and online tests (15%)||Exam 1.5 hours (50%)||10-19||August Examination Period|
If student fails the module but passed one of the terms, only the assessment for the term failed needs to be retaken.
- 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?
Last revision date