Microeconomics for Managers Course of MBA at Hitotsubashi University
ICS , Graduate School of International Corporate Strategy
[Term 2] Microeconomics for Managers (S. Lippert) (2008/Term 1&2 (Fall&Winter))
Microeconomics offers general principles and analytical tools for understanding complex business situations and optimizing decisions. The course teaches how to apply microeconomics to common management problems including designing pricing and implementing pricing strategies, competing with rivals, and structuring incentives. The course also introduces game theory and exposes students to the art of analytical modeling of business situations. The course will finally examine how to strike the right balance between profit and market share. The course does not assume previous knowledge of economics or advanced mathematics. However, the course makes extensive use of algebra (variables, functions, equations) and graphs.
Course Structure
The course is divided into three modules, as follows:
(1)Demand and pricing
(a) Fundamentals: elasticity, consumer surplus, market structures
(b) The profit equation: price, costs, units sold
(c) Non-linear pricing: two-part tariff
(d) Bundling
(2)Competition and game theory
(a) Oligopoly
(b) Industry entry, entry deterrence
(c) Signaling
(d) Attrition, bargaining
(3)Designing incentives
(a) Principal-agent model
(b) Balancing risk and incentives
(c) Managing for Profit vs. Market Share
(d) Useful tools, methods, and frameworks
Teaching Method
Cases will be used for class discussion, setting the context and illustrating real-world applicability of the concepts. Concepts will be presented in an interactive lecture format using analytical models expressed in algebra and graphs. Several problem sets will be assigned during the semester to encourage evenly-distributed learning throughout the semester, deepen and confirm understanding of concepts, and provide practice for the final exam.