Managerial Economics

Overview

Managerial Economics is concerned with the application of economic principles and methodologies to the decision-making process inside corporations and other organisations operating under conditions of risk and uncertainty. Students acquire a solid foundation in key analytical tools: game theory, transaction costs, information asymmetries and the principal-agent problem. These tools are used to understand organisational architecture: the assignment of decision rights within organisations, the methods of incentivising individuals, and the structures and systems used to evaluate the performance of individuals and business units. This module draws on material from allied academic fields, including personnel economics, behavioural economics, financial economics and business history.

Learning Objectives

• Students will gain a better understanding of the functioning of economic agents under conditions of risk and uncertainty.
• Students will acquire detailed knowledge about the economics of the firm, including the specific role of information, property rights and transaction costs.
• Students will become familiar with key issues facing the owners, managers and employees of business organisations, including how these issues change with the external economic environment.
• Students will learn how to identify, describe, analyse and solve a selection of real-world problems in managerial economics.

Skills

Skills gained include: logical reasoning and problem solving, working effectively in groups, and written and verbal communication skills.

Assessment

Students must achieve an overall mark of 40% in the module to pass