Course Details

Course Number: 95-710

Economic Analysis

Units: 6

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.


Alessandro Acquisti
Karen B. Clay
Tiong Kiong Lim
Veronica Marotta