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Managerial Economics 735555

Managerial Economics is a subject offered by the Melbourne Business School for which graduate law students may obtain credit towards the Graduate Diploma in Competition Law or, subject to the condition stated below, a Master of Laws or Master of Commercial Law. It is anticipated that this subject will be of interest to those practising or seeking to practise in competition law who wish to advance significantly their knowledge of industrial organisation economics.

Competition law requires understanding how markets operate and how firms make decisions that bear on competitive dynamics. Managerial Economics is an introduction to the core concepts in economics relevant to managerial and strategic decision making by firms. It focuses, in particular, on the role of firm strategy in determining price and non-price outcomes and how these impact on market competition.  It will provide those practising in competition law with the skills to contribute to and critically assess an economic analysis of the purposes and effects of business decisions on competition in a market.

Eligibility to enrol in Managerial Economics

Students enrolled in the Graduate Diploma in Competition Law will be eligible to take Managerial Economics regardless of which other three subjects they select from the prescribed list of subjects for the graduate diploma. Students enrolled in a Master of Laws or Master of Commercial Law will only be eligible to take this subject if they have completed or propose to complete at least two of the other competition law subjects available in the graduate program. For a full list of these subjects, see All subjects .

Students enrolling in Managerial Economics should be familiar with basic algebra (at the level found on the GMAT standardised test, for example) and simple graphing techniques, and be willing to learn a few simple rules of calculus. Prior to applying for enrolment in this subject, students should discuss their application with the Director of Studies, Dr Caron Beaton-Wells .

Timetabling of Managerial Economics

Students should also note that this subject is run three times each year, once in each of the MBS terms. There is one lecture each week, generally scheduled from 5-9pm.

Objectives
Objectives

At the conclusion of the subject, students should understand the following concepts:

  • How to distinguish between market and strategic decisions and know which tools are appropriate for each
  • In market situations, understand the concepts of value , added value , and value appropriation
  • How to analyse the forces driving economic negotiations over value divisions (e.g., the determinants of market prices)
  • The special case of perfectly competitive markets and how prices and volumes are determined in such markets
  • The basic elements of game theory and its application to strategic behaviour of firms;
  • How strategic behaviour affects competitive outcomes
  • How market externalities arise and how they are solved - especially network externalities

 

 

Syllabus
Syllabus

Principal topics:

  • Economic decision making and decision trees, sunk cost and opportunity cost
  • Value creation (willingness to pay and willingness to sell)
  • The relationship of bargaining outcomes to value, an introduction to competitive game theory
  • Sequential game theory, the role of commitments, credibility and its application to bargaining theory
  • Decision making by a monopolist as an example, enhancing bargaining power by a monopolist
  • Monopoly pricing to mass markets
  • Price discrimination
  • Simultaneous game theory
  • Oligopoly competition in markets
  • Collusion and Tacit Collusion
  • Perfect competition; prices and market efficiency
  • Market Entry and Exit.
More information about Managerial Economics

As  this subject is administered by the Melbourne Business School, prospective  students should treat the information available on this webpage as a starting point only and should be aware that changes may be made to the subject objectives, syllabus, timetabling, or lecturers that may not necessarily be reflected on this webpage.

For persons interested in finding out more about the subject, additional information can be obtained from:

Once enrolled in the subject, law students will be given access to the MBS web-site (intranet) from which more detailed information about the syllabus, approach to teaching, assessment and materials will be available.