Illinois MBA 501 Economics Syllabus
Content
University of Illinois at Urbana-Champaign College of Business MBA 501: Managerial Economics Fall 2013 Syllabus
Instructor Information Prof. Jeff Brown Office: 4034 BIF Phone: 217-333-3322 Email: [email protected] Office hours: by appointment Course Assistants Tyler Droppers Tar Ananpongsuk David Wang
[email protected] [email protected] [email protected]
About this Course A business leader’s ability to respond to, harness, and manage the risk of market forces can make or break any company, whether it be an apple orchard or Apple, Inc. In this course, we will seek to understand market forces in a practical way. To develop this skill, it is necessary to understand the basic insights of economic theory. But it is also necessary to learn to apply economic thinking to realistic business problems. Thus, this course will intertwine a discussion of economic principles with practical applications to present-day business challenges. At its core, economics is about a few simple principles. First, it is about understanding how individuals or organizations should go about optimally allocating scarce resources, such as money, time, or other resources. An important part of this is learning to make decisions “on the margin.” Second, it is about understanding incentives. One can understand a large share of human behavior if one can understand the economic incentives that people face. Third, it is about recognizing the enormous power of free markets, and understanding conditions under which non-market factors (e.g., government policies) can improve or worsen outcomes. Students’ views may vary as to whether free markets and the profit motive are vile or virtuous, but there should be no disagreement as to their power. As with virtually any economics course, our analysis will typically start by assuming that we are dealing with rational actors. But we will also acknowledge (and incorporate) the ongoing intellectual shift toward behavioral economics, an emerging set of tools and models that recognize that people exhibit a wide range of decision-making biases that influence their choices in important ways. In general, economists have an extremely powerful (if occasionally peculiar!) way of understanding the world. My overall goal is to help you advance your understanding in a way that will help make you a better business leader, a smarter consumer, and even a better-informed citizen.
Course Website This course will use Compass 2g website for nearly everything. You will be able to find everything you need on this site, including required mini-lectures on video, online quizzes (that count towards your grade!), copies of this syllabus, a list of required readings from the text book, links to other required readings, the class schedule, and much more. You should check the course Compass site every day! I will also use the Compass announcement feature and the Compass grade-book as well.
Your Weekly Schedule Monday Tuesday 9pm No class except group presentation weeks Pre-class exercise due on Compass Weekly online quiz is due on Compass (you should have all weekly readings completed before taking the quiz!)
Wednesday
9:30-10:50 Class meeting time 11:00-12:20 Material for next week goes live on Compass Problem set due on Compass
Wednesday Noon Sunday 9pm
Grading Your overall grade will be determined based on the following weights: Online quizzes Other pre-class exercises Class participation Problem sets Group presentation Peer evaluation Final Exam I will use +/- grading in the course. 10% 10% 10% 15% 10% 5% 40%
Required Readings The required textbook for this course is: Steven Landsburg, Price Theory and Applications, 8th Edition, South-Western You will be assigned readings from the textbook before every class. You are expected to come to class having done your very best to master the material. A short 5-question online quiz will help ensure that you have at least covered the basics. I will spend the first 20 minutes of class every Wednesday reviewing any material that people found especially difficult, but the rest of class will be spent on discussion and exercises. The talented course assistants will also be available to help you if you need further guidance on the material. In addition to the textbook, I will occasionally require additional readings as well. These readings will be posted on the course Compass site.
Group presentation: Each group will conduct a brief class presentation to apply concepts from this class to a business situation. More details will follow. Working in Groups: In general, I encourage working in your assigned study groups. In many cases, your assignments will be turned in and graded as a group. In other cases, you will be asked to complete an assignment individually. Please pay special attention to whether any given assignment is group or individual. For group assignments, all group members will receive the same grade. Remember that 5% of your grade in this course is how effectively you work with your group, a score that will be based entirely on the confidential evaluations of your group members. So if you “free ride” or do not work effectively with your group, this may adversely affect your course grade. Pre-class assignments will always be due by 9PM on Tuesdays (this includes both individual quizzes as well as an individual or group pre-class work). Problem sets will always be due by 9PM on Sundays. All assignments must be submitted via COMPASS, and the website time-stamps your submission. NO LATE ASSIGNMENTS ARE ACCEPTED. No exceptions will granted for any reason, so plan ahead. Final Exam: Your final exam will be Wednesday October 16. The exam will cover all the material from class lectures, discussions, assignments, and all readings. It will be closed book, closed notes, and will be a mix of quantitative and qualitative questions. Questions will be similar in style to those from online quizzes, problem sets and in-class discussions.
Academic Integrity All students are expected to abide by the provisions of the University of Illinois student code with respect to all issues, including academic integrity. You are encouraged to read the University Code, which can be found at the following web link: http://admin.illinois.edu/policy/code/Pocket_Code_web2012.pdf Disabilities To ensure that disability-related concerns are properly addressed from the beginning, students with disabilities who require reasonable accommodations to participate in this class are asked to see Prof. Brown as soon as possible. BIF Emergency Procedures We will go over instructions for severe weather events on the first day of class. In the event of a fire in BIF, exit BIF and proceed to 141 Wohlers Hall. In the event of threat from a shooter on campus, lock down the classroom and move to a place of safety within the classroom. If you encounter a suspicious package, do not touch the package, alert campus security, and refrain from cell phone usage until the situation is resolved. More detailed information and action instructions are available in the BIF Building Emergency Action Plan. About your Instructor You can see my website (www.business.illinois.edu/jbrown) for a full bio and my CV. But here is the essence of what you need to know: I love economics. I find the subject to be endlessly fascinating and incredibly powerful. My goal in this course is not to provide you with the same “off the shelf tool kit” as some other disciplines such as accountancy (e.g., learning how to read a balance sheet) or finance (e.g., learning how to price an American call option). Rather, my goal is to help you develop an enormously effective way to think about the world. “Thinking like an economist” becomes more increasingly important the higher up you go in any organization. To be blunt, an entry level analyst needs to understand how to program in Excel, whereas the CFO or CEO needs to understand markets. I want to train you to be the latter. My views on this come from experience. In addition to being a professor, I have previously worked as a brand manager at Procter & Gamble, as a White House economist, and on the boards of a Fortune 100 financial services firm, several not-forprofit organizations, and the U.S. Social Security system. I have also consulted with numerous government agencies and both public and private corporations, have testified before Congress, and advised political candidates running for everything from local office to the U.S. Presidency. I am not telling you these things to be immodest. Rather, I am telling you because my experience has convinced me of the power of economics, and I hope some of my enthusiasm will wear off on you!
Instructor Information Prof. Jeff Brown Office: 4034 BIF Phone: 217-333-3322 Email: [email protected] Office hours: by appointment Course Assistants Tyler Droppers Tar Ananpongsuk David Wang
[email protected] [email protected] [email protected]
About this Course A business leader’s ability to respond to, harness, and manage the risk of market forces can make or break any company, whether it be an apple orchard or Apple, Inc. In this course, we will seek to understand market forces in a practical way. To develop this skill, it is necessary to understand the basic insights of economic theory. But it is also necessary to learn to apply economic thinking to realistic business problems. Thus, this course will intertwine a discussion of economic principles with practical applications to present-day business challenges. At its core, economics is about a few simple principles. First, it is about understanding how individuals or organizations should go about optimally allocating scarce resources, such as money, time, or other resources. An important part of this is learning to make decisions “on the margin.” Second, it is about understanding incentives. One can understand a large share of human behavior if one can understand the economic incentives that people face. Third, it is about recognizing the enormous power of free markets, and understanding conditions under which non-market factors (e.g., government policies) can improve or worsen outcomes. Students’ views may vary as to whether free markets and the profit motive are vile or virtuous, but there should be no disagreement as to their power. As with virtually any economics course, our analysis will typically start by assuming that we are dealing with rational actors. But we will also acknowledge (and incorporate) the ongoing intellectual shift toward behavioral economics, an emerging set of tools and models that recognize that people exhibit a wide range of decision-making biases that influence their choices in important ways. In general, economists have an extremely powerful (if occasionally peculiar!) way of understanding the world. My overall goal is to help you advance your understanding in a way that will help make you a better business leader, a smarter consumer, and even a better-informed citizen.
Course Website This course will use Compass 2g website for nearly everything. You will be able to find everything you need on this site, including required mini-lectures on video, online quizzes (that count towards your grade!), copies of this syllabus, a list of required readings from the text book, links to other required readings, the class schedule, and much more. You should check the course Compass site every day! I will also use the Compass announcement feature and the Compass grade-book as well.
Your Weekly Schedule Monday Tuesday 9pm No class except group presentation weeks Pre-class exercise due on Compass Weekly online quiz is due on Compass (you should have all weekly readings completed before taking the quiz!)
Wednesday
9:30-10:50 Class meeting time 11:00-12:20 Material for next week goes live on Compass Problem set due on Compass
Wednesday Noon Sunday 9pm
Grading Your overall grade will be determined based on the following weights: Online quizzes Other pre-class exercises Class participation Problem sets Group presentation Peer evaluation Final Exam I will use +/- grading in the course. 10% 10% 10% 15% 10% 5% 40%
Required Readings The required textbook for this course is: Steven Landsburg, Price Theory and Applications, 8th Edition, South-Western You will be assigned readings from the textbook before every class. You are expected to come to class having done your very best to master the material. A short 5-question online quiz will help ensure that you have at least covered the basics. I will spend the first 20 minutes of class every Wednesday reviewing any material that people found especially difficult, but the rest of class will be spent on discussion and exercises. The talented course assistants will also be available to help you if you need further guidance on the material. In addition to the textbook, I will occasionally require additional readings as well. These readings will be posted on the course Compass site.
Group presentation: Each group will conduct a brief class presentation to apply concepts from this class to a business situation. More details will follow. Working in Groups: In general, I encourage working in your assigned study groups. In many cases, your assignments will be turned in and graded as a group. In other cases, you will be asked to complete an assignment individually. Please pay special attention to whether any given assignment is group or individual. For group assignments, all group members will receive the same grade. Remember that 5% of your grade in this course is how effectively you work with your group, a score that will be based entirely on the confidential evaluations of your group members. So if you “free ride” or do not work effectively with your group, this may adversely affect your course grade. Pre-class assignments will always be due by 9PM on Tuesdays (this includes both individual quizzes as well as an individual or group pre-class work). Problem sets will always be due by 9PM on Sundays. All assignments must be submitted via COMPASS, and the website time-stamps your submission. NO LATE ASSIGNMENTS ARE ACCEPTED. No exceptions will granted for any reason, so plan ahead. Final Exam: Your final exam will be Wednesday October 16. The exam will cover all the material from class lectures, discussions, assignments, and all readings. It will be closed book, closed notes, and will be a mix of quantitative and qualitative questions. Questions will be similar in style to those from online quizzes, problem sets and in-class discussions.
Academic Integrity All students are expected to abide by the provisions of the University of Illinois student code with respect to all issues, including academic integrity. You are encouraged to read the University Code, which can be found at the following web link: http://admin.illinois.edu/policy/code/Pocket_Code_web2012.pdf Disabilities To ensure that disability-related concerns are properly addressed from the beginning, students with disabilities who require reasonable accommodations to participate in this class are asked to see Prof. Brown as soon as possible. BIF Emergency Procedures We will go over instructions for severe weather events on the first day of class. In the event of a fire in BIF, exit BIF and proceed to 141 Wohlers Hall. In the event of threat from a shooter on campus, lock down the classroom and move to a place of safety within the classroom. If you encounter a suspicious package, do not touch the package, alert campus security, and refrain from cell phone usage until the situation is resolved. More detailed information and action instructions are available in the BIF Building Emergency Action Plan. About your Instructor You can see my website (www.business.illinois.edu/jbrown) for a full bio and my CV. But here is the essence of what you need to know: I love economics. I find the subject to be endlessly fascinating and incredibly powerful. My goal in this course is not to provide you with the same “off the shelf tool kit” as some other disciplines such as accountancy (e.g., learning how to read a balance sheet) or finance (e.g., learning how to price an American call option). Rather, my goal is to help you develop an enormously effective way to think about the world. “Thinking like an economist” becomes more increasingly important the higher up you go in any organization. To be blunt, an entry level analyst needs to understand how to program in Excel, whereas the CFO or CEO needs to understand markets. I want to train you to be the latter. My views on this come from experience. In addition to being a professor, I have previously worked as a brand manager at Procter & Gamble, as a White House economist, and on the boards of a Fortune 100 financial services firm, several not-forprofit organizations, and the U.S. Social Security system. I have also consulted with numerous government agencies and both public and private corporations, have testified before Congress, and advised political candidates running for everything from local office to the U.S. Presidency. I am not telling you these things to be immodest. Rather, I am telling you because my experience has convinced me of the power of economics, and I hope some of my enthusiasm will wear off on you!
