Economic Analysis (95-710)

This is a course in microeconomics and its implications for management and strategy – particularly (but not exclusively) in the context of information technology firms. Microeconomics, as discussed in this course, focuses on the models and methods by which managers can analyze their market and organizational environment to make optimal decisions. The key to such optimal decision- making is an understanding of the trade-offs in allocating scarce resources. The core models of microeconomics are fundamental to more applied areas of management such as strategy, marketing, production, and finance. 

The course will begin with an examination of the underlying structure and models of competitive markets, and the efficiency and welfare implications of those models. We will then examine economic models that describe firm output, pricing and entry/exit decisions. These models will then be applied to a variety of market contexts, including monopoly, oligopoly, and competition. As we go through this analysis, we will seek to understand the implications of the theory for information technology firms. We will also examine interesting dynamics between information, agents and economic outcomes in the context of game theory.

Learning Objectives: 

The main objective of this course is to provide a level of economic “literacy” that will allow students to understand and apply crucial economic concepts to areas as diverse as management decision making and finance; marketing and strategy; policy making and social analysis. A second, related objective of this course is to discuss the particular economic characteristics of the IT industry, and to offer tools to understand its processes and mechanisms.

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