Firms and Markets

(1.5 Credits)

This course aims to give you insight into how markets work. We will start by studying consumer and firm decision-making and how they interact with each other in markets. We will use tools based on game theory to understand firms’ strategic behavior in various situations. We conclude by analyzing how market conditions impact firm profitability and efficiency. Microeconomics (as this course's topic is frequently referred to) is an essential component of an MBA education. First, microeconomics gives us important insights into specific dimensions of optimal firm decision-making, such as pricing and entry and exit. Second, the formal economics perspective on business plays a vital role in other areas of MBA study, such as finance, strategy, and marketing. Some key concepts we will introduce include economic incentives, marginal analysis, opportunity cost, market competition, strategic behavior, and asymmetric information. Our experience with students is that much of this is intuitive, but much is not, and we hope that the combination of theoretical structure and practical examples will provide you with valuable insights in the years to come.