Managerial Economics

Course code: ECO330

Term and year: Spring 2025

Day and time: Mondays 15:30-18:15

Instructor: Ing. Jan Havel, Ph.D. GMP

Instructor contact: jan.havel@aauni.edu

Consultation hours: Mondays 18:15-19:15

1.   Course Description

This course is focused on application of economic thinking on various problems and decisions faced by managers. The course covers several concepts from contemporary microeconomics: game theory, principal agent theory and contract theory, decision making under uncertainty, and behavioral economics. The course first builds a theoretical foundation and then applies the theories to specific problems faced by managers using case studies and examples from businesses.

2.   Student Learning Outcomes

Upon completion of this course, students should be able to:

●        Explain and apply to specific situations the following economic concepts and theories relevant: principal-agent theory, game theory and its basic solution concepts, theory of contracts

●        Explain and apply to specific situations the concepts studied by behavioral economics, specifically: intertemporal choice, decision making under uncertainty, various deviations from rational decision making

●        Analyze existing real-world situations and apply the theories to identify possible problematic areas; recommend and defend solutions

●        Discuss the application to the theories to specific situations, such as: organizational design, design of incentives for employees, outsourcing, nonprofit organizations

●        Present and defend own findings, in writing and orally

3.   Reading Material

Required Materials

●        Brickley, J., Smith, C. W., Zimmerman, J. (2015). Managerial economics and organizational architecture. Dubuque, IA : McGraw-Hill Education

Recommended Materials

●        Laffont, J. J., Martimort, D. (2002). The theory of incentives: The principal-agent model. Princeton, N.J.: Princeton University Press.

●        Wilkinson, N., Klaes, M. (2018). An Introduction to behavioral economics. London : Macmillan Education Palgrave.

●        The Economist, newspaper

4.   Teaching methodology

Lectures, mini-lectures, group work, simulations, role playing, discussions, case study analyses, student presentations.

5.   Course Schedule

6.   Course Requirements and Assessment (with estimated workloads)

*1 = Critical Thinking; 2 = Effective Communication; 3 = Effective and Responsible Action

7.   Detailed description of the assignments

Assignment 1:

Assessment breakdown

8.   General Requirements and School Policies

General requirements

All coursework is governed by AAU’s academic rules. Students are expected to be familiar with the academic rules in the Academic Codex and Student Handbook and to maintain the highest standards of honesty and academic integrity in their work. Please see the AAU intranet for a summary of key policies regarding coursework.

Course specific requirements

There are no special requirements or deviations from AAU policies for this course.