Corporate Economics 752
Syllabus
SHELDON B. LUBAR SCHOOL OF BUSINESS
Executive MBA Program – 3 credits
Block 4 – Summer 2020
INSTRUCTOR: Richard D. Marcus, Ph.D.is an Associate Professor of Business and the Chair of the LSB Executive Committee
OFFICE: S430F in Lubar Hall. My mailbox is also on the fourth floor of Lubar Hall; however, in a virtual class, my email is best for sending me involved questions, or my phone is best for asking quick questions.
OFFICE HOURS: As this is presented on-line due to the COVID-19 problems, most anytime is available for students during Block 4. Call, text, or email. We can chat with video if you wish.
TELEPHONE: 414-510-7731 (cell calls and text messages)
E-mail: marcus@uwm.edu
HOMEPAGE: https://sites.uwm.edu/marcus/
BUSINESS ECONOMICS 752: Economic analysis of problems in business and public policy issues so that an MBA graduate will be able to think and speak like an economist. I plan a series of topics from macroeconomics and business cycles, to traditional issues of price elasticities, cost and production functions, and pricing issues in the market. Marketing and behavioral applications of economic concepts will be highlighted as well as issues involved in financial markets. A portion of each class period will be set aside to discuss economic or political issues occurring in the world or things that seem puzzling. After all, one of the leading journals in economics is called the Journal of Political Economy, and your teacher thinks of himself as both a political economist and a finance professor.
ON-LINE LECTURES AND DISCUSSION: I plan to use Canvas, Collaborative Ultra, and Microsoft Teams. Our class sessions will be on Teams. I will post short video preparations for class on Collaborate Ultra on a few key topics. As you have already used Teams in classes, I will use Microsoft Teams and Teri will send you links to 3 meetings per class. My plan is for 3 topics per lecture session with breaks of 10 to 15 minutes between topic. I will pick the topics, like stepping stones across a creek in the forest of confusion leading us to understanding on the other side.
Stepping Stones through the Forest of Confusion by Heather Mount, used with permission from unslash.com
TEXTBOOK and a popular TRADE BOOK: Economics for Managers, Third Edition, by Paul G. Farnham, Pearson is the textbook and Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler and Cass Sunstein, Yale University Press is the trade book.
CLASS ASSIGNMENTS: For the first six times we meet, I will have an assignment posted on Canvas to complete after the class. Each of these 6 assignments are worth 20 points each, for a total of 120 points.
FINAL EXAM: There is one final on Saturday, August 1 at 3:45pm after an hour review session. I will have the final open for you to do anytime from 3:45pm August 1 through August 2 online and essay style. The Final is worth 100 points.
BEHAVIORAL ESSAY: There is about a 2-page essay required by August 1, but can be done early. This is an observational essay of errors or blunders you see in yourself, your work colleagues, your family, your friends, or society. This essay will typically focus on one or many two types of errors discussed in our class that you witnessed that were discussed in Thaler and Sunstein’s Nudge book, what you observed, what the issue is, and what can be done perhaps to avoid the blunder. The Behavioral Essay is worth 100 points.
GRADES: Grades will be based on the assignments, the essay final, and the behavioral economics essay on examples you’ve discovered in your life, for maximum total points of 320. There are no “extra credit” points available.
TIME EXPECTATIONS: In a regular semester, for each hour of lecture there are typically two hours or preparation. For our 3 hour classes, that means ideally about 6 hours of preparation for daily quizzes, reading the assigned reading, and more time preparing for the final. I will hold the classes during our time period, but as I can record them, I will post them if you have to miss sometime.
MISSION and VISION: As our mission includes impactful teaching that is both innovative and analytical, we we see how the tools of price elasticity informs pricing decisions to raise or lower price, how the behavioral errors can be overcome, and how economic concepts of scarcity empowers almost all innovation.
CLASSROOM POLICIES: UWM has long-standing policies on academic misconduct, sexual harassment, discrimination, adding, dropping, withdrawal, repeating classes, and changes of grade. These policies are available at: https://sites.uwm.edu/marcus/policies/
SPECIAL NEEDS: If anyone has a need for note-taking or test assistance, please fell free to discuss this with me early in our block. Slide presentation are available in a notebook or weekly and will also be available on Canvas and recordings of our weekly Microsoft Teams meetings will also be available on Canvas. Before each class, I will post a short video discussion of a key topic that week that you access also by Canvas.
SOCIAL CONNECTIVITY: Economic and financial announcements are frequent. Some will be highlighted for your special attention. These appear on Facebook that can be accessed without being a member or you may like the page UWMFinance350 and LinkedIn. The links are: https://www.facebook.com/UWMFinance350/ and https://www.linkedin.com/in/dick-marcus-8176251/
Class Schedule for EMBA Corporate Economics 752
Friday, June 12 at 5:30pm to 8:30pm – Stepping Stone 1: Microeconomic and macroeconomic influences on mangers (Farnham, Chap 1); Stone 2: How to measure the whole economy (Farnham, Chap 11); and Stone 3: Demand, supply, and equilibrium in individual markets as well as the whole economy (Farnham, Chap 2). Assignment 1 will be using Supply and Demand for an industry and Aggregate Demand and Aggregate Supply to understand whole economies.
Saturday, June 13 at 2:45pm to 5:45pm – Stepping Stone 4: Business cycles and paths to and through recessions (Farnham, Chap 12); Stone 5: Biases, blunders, and resisting all sorts of unfortunate temptations (Thaler, Intro, Chap 1, and Chap 2); and Stone 6: Monetary economics, the Fed, and a brief history of money (Farnham, Chap 13). Assignment 2 will be using Behavioral Economics to see blunders, biases, and temptations in our real word decision making.
Saturday, June 27 at 11:05am to 2:35pm including a 30 minute lunch break – Stepping Stone 7: Demand elasticities including price, income, cross-price elasticities (Farnham, Chap 3); Stone 8: How to find our service or product’s elasticity (Farnham, Chap 4); and Stone 9: Save more tomorrow, herd mentality, and the mother of all biases of over-confidence (Thaler, Chap 6 and then Chap 3). Assignment 3 will estimating the revenue impacts from price changes and income changes in an industry if you knew the price and income elasticities in that industry.
Saturday, July 11 at 8am to 11am – Stepping Stone 10: Living in the short run with our firm’s costs and production (Farnham, Chap 5); Stone 11: What the heck are isoquants and production and cost functions in the long run including economies of scale and economies of scope (Farnham, Chap 6 and its Appendix); and Stone 12: When do I need a nudge? And managing my choice architecture (Thaler, Chapters 4 & 5). Assignment 4 will be on short run and long run production functions and whether the firm was “efficient” or could improve by changing its mix of inputs. Also some more behavioral mistakes.
Friday, July 24 at 5:30pm to 8:30pm – Stepping Stone13: Perfect competition and industrial supply (Farnham, Chap 7 and its Appendix); Stone 14: Let’s play monopoly and natural monopoly and price discrimination (Farham, Chap 8); and Stone 15: Dealing with risk, prospect theory, naïve investing, and credit markets (Thaler, Chap. 7 and 8) Assignment 5 will be on industrial organization of competition, monopoly, and price discrimination.
Saturday, July 25 at 2:45 to 5:45pm – Stepping Stone 16: Oligopoly in its many forms (Farnham, Chap 9); Stone 17: Let’s play GAME THEORY and explore the prisoner’s dilemma; Stone 18: Organ donation, mating, and marriage – close the door to your study room tonight as this is economics that is not rated G (Thaler, Chap 11 and 15). Assignment 6 will be on Game Theory and Oligopoly industry types. Most of you do not face pure competition but various degrees of oligopoly power.
Saturday, August 1 at 2:45pm – 5:45pm – Stepping Stone 19: Reviewing macroeconomics, elasticities, production and cost functions, competition, monopoly, oligopoly models; Final: Essay style online final that will be open from 3:45pm through Sunday, August 2 at midnight. The exam is designed to be no more than 2 hours but you may take it flexibly, either right during our time period 3:45-5:45 or later that day or the next. Also, send in your Behavioral Essay by August 1 to my email please.
Out of the Forest of Confusion and Safely Crossing the Creek by Matt Heaton – permission to use photo from unsplash.com
Scores and grades will be posted on Canvas, assuming I’ve mastered this newfangled thing. Honestly, I am sounding like my dad, more and more. Beware, it will happen to you too, if not already.