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Module

NBS8301 : Managerial Economics and Organisational Architecture

  • Offered for Year: 2021/22
  • Module Leader(s): Professor Simon Hussain
  • Lecturer: Professor David Higgins
  • Owning School: Newcastle University Business School
  • Teaching Location: Newcastle City Campus
Semesters
Semester 1 Credit Value: 10
Semester 2 Credit Value: 10
ECTS Credits: 10.0

Aims

This module aims to provide an advanced understanding of market structure and develop essential tools for the economic analysis of business decisions. The module also develops problem-solving skills and the ability to critically appraise academic research within the module project.

Outline Of Syllabus

Semester 1: Analytical tools and techniques for business

1. Introduction to business tools and methods
Basic statistics for business and finance: measures of distributional characteristics; measures of statistical association.

2. OLS regression
Use of OLS to estimate linear relationships; use of OLS to estimate nonlinear relationships and trends; limitations to OLS regression.

3. Business forecasting
Time-series models; assessing forecast accuracy; the use of economic leading indicators; evidence from firm-specific profit forecasts.

4. Optimisation
Linear programming in economic optimisation.

5. Theory of games
Pure strategy games and the Nash Equilibrium; limitations of pure strategy games; application of mixed strategy games to obtain a one-shot Nash Equilibrium.

6. Critical path analysis
Application of critical path analysis to projects; the insights and limitations of this methodology


Semester 2: Economic concepts for business

1. Introduction to business economics
(a) Course objectives and scope;
(b) Determinants of profit; economic analysis of demand and supply, market equilibrium, various types of elasticity, total revenue and costs

2. Market structure
(a) The structure-conduct-performance paradigm (SCP) and an evaluation of its predictions
(b) The resource-base-view of the firm (RBV) and persistence of profits (POP) methodology

3. Oligopoly
(a) Models in which interdependence not recognised (Cournot)
(b) Game theory and Nash equilibria

4. Pricing Strategies
(a) Transfer pricing
(b) Price discrimination and its desirability

5. Barriers to entry
(a) Simple models involving price and minimum efficient scale
(b) Game theoretic approaches
(c) Government regulation

6. Models of non-price competition
(a) Advertising and optimal advertising expenditure
(b) Horizontal and vertical product differentiation

7. The market for corporate control
(a) Criticisms of the neo-classical model
(b) Behavioural theories of the firm and a review of the empirical evidence

Teaching Methods

Teaching Activities
Category Activity Number Length Student Hours Comment
Guided Independent StudyAssessment preparation and completion160:0060:00To complete formative and summative assessments.
Scheduled Learning And Teaching ActivitiesLecture91:009:00PiP lectures in Semester 1
Scheduled Learning And Teaching ActivitiesLecture91:3013:30PiP lectures in semester 2
Structured Guided LearningLecture materials61:006:00Pre-recorded lecture materials.
Guided Independent StudyDirected research and reading161:3061:30Includes component relating to project plus lecture topics.
Scheduled Learning And Teaching ActivitiesSmall group teaching61:006:003 x 1 hour in Sem 1; 3 x 1 hour in Sem 2.
Structured Guided LearningStructured non-synchronous discussion21:002:002 x 1 hr in Sem 1 to support S1 project.
Guided Independent StudyIndependent study138:0038:00Independent study.
Scheduled Learning And Teaching ActivitiesScheduled on-line contact time41:004:002 x 1 hour in Sem 1; 2 x 1 hour in Sem 2.
Total200:00
Teaching Rationale And Relationship

Lecture materials provide a framework for student centred learning and provide the appropriate vehicle for delivery of material that leads to the construction of a report (semester 1) and the individual written exam (semester 2).

Assessment Methods

The format of resits will be determined by the Board of Examiners

Exams
Description Length Semester When Set Percentage Comment
Written Examination1202A80N/A
Other Assessment
Description Semester When Set Percentage Comment
Report1M20Group Project of 6000 words.
Formative Assessments
Description Semester When Set Comment
Prob solv exercises2MOpportunities for students to submit practice attempts at exam questions prior to Sem 2 exam
Assessment Rationale And Relationship

Lecture materials provide a framework for student centred learning and provide the appropriate vehicle for delivery of material that leads to the construction of a report (semester 1) and the individual written exam (semester 2).

• The project develops problem-solving, IT and numeracy skills using real-world data. It also builds report-writing skills.
• The exam in semester 2 requires students to engage critically with concepts from economics within a business decision-making framework.

In the case of an alternative semester 2 assessment (worth 80% of the overall module mark) being necessary due to circumstances, the module leader will in the first instance consult with the DPD as to the requirements of the professional accrediting body to discuss possible acceptable alternatives. In 2020/21 this alternative was a 24 hour take home exam delivered online, and it is envisioned that if circumstances do not allow a present-in-person timed exam at the end of semester 2, and the professional body agrees, than this may well be an example of the type of alternative assessment which could be put in place.

Reading Lists

Timetable