Managerial Economics

Fall 2015

Instructor: Professor LIU DAY YANG

Office Phone: 886-2- 2730-1271
E-mail: liudy@mail.ntust.edu.tw

TA
JAMIE CHANG
0975-138030
jamie.chang0514@gmail.com

COURSE OBJECTIVES

This course builds on basic concepts of microeconomics, and places an emphasis on

the firms use of limited information in an uncertain environment. A global perspective
is stressed. In addition, the purpose of managerial economics is to contribute to your
understanding of how markets work and explore the challenge and opportunities that
markets pose for managers, firms and even governments. The course applies basic
economic principles to address issues that arise in a firms relationship with consumers,
suppliers, competitors, employees, other organizations, and the regulatory
environments. Managerial Economics also provides some fundamental building block
for other courses in the core curriculum, including Marketing, Management, Strategic
Formulation for Competitive Advantage, Corporate Finance, and the firm in the
National and International Economy.
In addition, this course intends to cover both theory from the textbook and its
applications in picking up relevant cases from HBS, i.e., chapters and cases are
discussed separately by each meeting during the semester.

COURSE MATERIALS
1. Textbook: William F. Samuelson and Stephen G, Marks, Managerial Economics,
seventh edition, John Wiley & Sons.
2. Other Good references come from James A. Brickley, Clifford W. Smith, Jr. and
Jerold L. Zimmerman, Managerial Economics and Organizational Architecture
(hereafter BSZ), Third Edition, McGraw Hill 2004. R. Charles Moyer and Frederick
H. deB. Harris, Managerial Economics, Applications, Strategy, and tactics, (hereafter
MMH), Duncan W. Reekie and Jonathan N. Crook, Managerial Economics, An
European Test, 4th edition, Prentice-Hall, 1995, and Petersen, H. Craig and W. Cris,

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 Lewis, Managerial Economics, 3rd edition, Macmillan Publishing Co., 1994. There
are some cases and readings will be handed out for this course. Most of these
materials are coming from various sources of Journals, magazines, articles, including
Business week, Forbes, Fortune, New York Times, Wall Street Journal, Harvard
Business Review, Financial Times, Money, Harvard Business School cases and many
more, etc.. To read course materials as much as you can is certainly crucial and
beneficial to your knowledge and learning. You also feel free without hesitation to
ask questions you may have anytime during the class.

EVALUATIONS

Your grade for this course will be based upon three parts(1) class attendances (30%);
based upon your individual performance on the classroom and actively engagement is
strongly encouraged;( 2)mid-term (30%) and (3) group final presentation (40%).

COURSE OUTLINE

Topics

1Introduction to economic decision-making and optimal decisions

using marginal Analysis, role of the entrepreneur in the
organization, maximization and optimization,
Daniel Kahneman, Dan Lovallo, Olivier Sibony (2011), Before
you make that big decision.
2Demand Analysis and optimal pricing and estimating and
forecasting demand
HBS case: Benjamin C. Esty and Michael Kane (2004), Airbus
A3xx (2004): Developing the worlds largest commercial jet
(A).
3Production and cost analysis
HBS case: Pankaj Ghemawat (2005), Haiers U.S. refrigerator
strategy.
4Perfect competition and monopoly
HBS case: David E. Bell (2011), Brasil Foods.
5Oligopoly, game theory and competitive strategy
HBS case: Neil Bendle (2012), paramount pictures: the
transformation dilemma.
6Regulation, public goods, and benefit-cost analysis
HBS case: Dylan Minor (2012), The Volker rue: financial
crisis, bailouts and the need for financial regulation.
7Decision making under uncertainty
HBS case: J. Robert Mitchell (2012),Uncertainty and
entrepreneurial action at Raedeo.com.
8The value of information
HBS case: Mohanbir Sawhney (2012),Microsoft office

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 Gaining insight into the life of a college student (A).
9Asymmetric information and organizational design
HBS case: Wei Li and jean Yuan (2005), The Xiangyang market.
10Auctions and competitive bidding
HBS case: Benjamin E. Esty (2005), Acquisitions of consolidated
rail corp. (A).

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