ECO 6322 - Economics of Strategic Behavior

Credits: 3 hrs

This course examines the underlying economics of successful business strategy, including the dynamics of entering an industry, the strategic imperatives of competitive markets, sources of competitive advantage, managing competitive interaction (cooperation and pre-emption), bargaining situations, the impact of information distribution and the financial implications of strategic economics. Since 1980, Michael Porter’s classic Competitive Strategy has provided the methodology that most big companies have used for strategic analysis. In this course, we attempt to offer a relatively new theory of competition - a theory that is simpler than Porter’s and easier for strategic planners to apply in real world business situations. In this course, we will demonstrate that the primary factor in determining competitive advantage is barriers to entry. We draw upon game theory principles to explain what a manager should do if barriers to entry are (a) strong, (b) weak, or (c) nonexistent. We cover a wide range of examples from retail to telecommunications to auction houses. The course offers excellent background for all consultants, managers and corporate finance generalists who will enroll in the capstone course MGT 6323-Business Policy and Strategy.