Fall 2017 MBA FNAN 603 Managerial Economics and Decisions of the Firm

Prof. Jiasun Li
Enterprise 225
(703) 993-3308
email: jli29@gmu.edu
https://sites.google.com/site/jiasunlihome/

Outline

1. Class meetings
2. Course Description
3. Reading materials
4. Exams and Grading
5. Class schedule
6. Honor Code

Meeting Schedule

1. MBA 603 -- 001 - Potomac - Thursday 6:30pm - 22:05pm - Buchanan Hall D023
2. MBA 603 -- 002 - Blue Ridge - Wednesday 6:30pm - 22:05pm - Founders Hall 111
3. MBA 603 -- 003 - Chesapeake - Monday 6:30pm - 22:05pm - Founders Hall 113*

Office hours: by appointment, but typically before or after class

*: Online session on Jan 15 MLK day due to university closure

1. Understanding of how goals, constraints, incentives, and market rivalry affect economic decisions;
2. The ability to apply present value analysis to make investment decisions and determine the value of assets and firms;
3. The ability to use supply and demand analysis as a qualitative forecasting tool to determine equilibrium market outcomes;
4. Understanding the factors that underlie both the demand and supply functions in order to be able to analyze consumer and producer behavior;
5. The ability to calculate and interpret elasticities and their applications to business decisions;
6. To acquire a framework for understanding the nature of the firm as an integrated whole, as opposed to a loosely connected set of functional departments;
7. The ability to choose appropriate measures of the firm’s optimal use of resources;
8. The ability to aid strategic thinking with tools from game theory;
9. Understand market structures and how they affect business decisions under perfect competition, monopolistic competition, oligopoly and monopoly;
10. Capability of using simple mathemematical tools to help with decision making (with respect to derivatives, please see the "Derivative rules" link in Week 1. Within that document we'll only ever work with four type of functions in our course: Constant, Line, Square, and Logarithms; don't ever bother with Exponential, Trigonometry, or Inverse Trigonometry; For derivative rules we'll only need Multiplication by constant, Power Rule when n=2 (square function), Sum Rule, Difference Rule, Product Rule, and Chain Rule);
11. (optional) Basic knowledge of the economic logics behind several FinTech topics, such as blockchain, cryptocurrency, crowdfunding, ICO

I will request your feedback periodically to reassess the list of topics above and adjust it if necessary. Any course feedback on how you think the course is evolving (including constructive criticism and suggestions) and potential additional topics to discuss in class will always be welcome.

Class Materials

Michael Baye and Jeff Prince, Managerial Economics and Business Strategy, 9^th ed., McGraw-Hill Irwin, 2016

I may include additional materials (most likely from the FinTech industry) from time to time for class discussions. The slides will be posted on before each class, but may change afterwards depending on the actual content that was covered and discussed during class. White board derivation will constantly be adopted to supplement the slides (so please bring a notebook). Last year some students asked about the use of Connect with the textbook. Feel free to purchase Connect if you wish, but it is NOT required and no support will be provided.

Exams and Grading

Group Presentation

Topics can be drawn from either one of the two sources: 1) an initial coin offering (ICO) deal of your choice with relevant information found here. 2) your own profession, or another industry that you are familiar with.

the presentation shall be done on a group base: please form a group of around 5 out of your own choice (If want to create a significantly larger or smaller group, fine too but let me know in advance). Please make sure you finish the group thing by 8th week (I'll send you reminders and more info on that). The time for the presentation is expected to be 5-10 minutes with three slides at most (this is subject to change as the final grouping outcome goes) Your analysis should clearly reflect what we learnt in class to the application of your choice. A suggested format is following:

Grading depends on the following criteria: 1) clarity: does the audience have a clear idea about your industry/firm/project after the presentation? 2) novelty: do you point out something that is unique and not something obvious to everyone? 3) relevance: do you clearly connect your argument with one of the topics we discussed in class?

I value quality over quantity: better have one well-thought, creative, and relevant point than covering everything superficially.

For Monday cohort only: depending on the tech works out, we may replace the presentation with a written memo not exceeding 1 page (single-spaced), exclusive of tables, graphs, etc. I'll let you know in due course.

Tentative Schedule (subject to change as we progress)

In case of disruptions such as inclement weather or campus closure, etc., we will have online sessions in lieu of the class meeting.

Honor Code

By registering for this class, students agree to abide by the honor code, which describes the standards of conduct, academic violations, and the treatment of academic offenses. The Honor Code states that all students "pledge not to cheat, plagiarize, steal, or lie in matters related to academic work." Visit http://oai.gmu.edu/the-mason-honor-code-2/ to read more about the GMU academic integrity code. The Business School policy on honor code violations in presented at the end of this document.

* This syllabus is subject to change to best fit the needs of the class.