In this course, central aspects of economic thinking will be applied to managerial contexts, including:

• Demand theory and estimation (basics)
• Pricing strategies (price discrimination, bundling)
• Strategic decision making (game theory, oligopolistic markets)
• Principal-Agent situations (incentive contracts)

After completing this course, students will be able to apply basic contents and methods from the field of managerial economics to solve problems in practical situations. Managerial economics uses economic concepts and methods to aid decision making processes in companies or to solve management-related problems. The course provides an introduction to the field’s most important methods and concepts. Students will learn to understand market demand and how to empirically estimate it; pricing strategies like price discrimination and bundling are discussed in particular detail. Based on simple game-theoretic concepts will be understood. Students will be able to approach strategic situations regarding other companies (e.g., in oligopolistic markets) as well as within the company (e.g., incentive contracts). In the empirical part of the course, students gain a first insight into empirical data analysis methods and learn how to interpret the results of empirical studies and independently conduct simple analyses.

This course (VUE) is a highly interactive course.

For a positive completion of the course a 70% presence is required. Note that for this course this translates into a minimum attendence of at least 5 units!

Should there be an important reason for an absence in the course, then a maximum of 30% of the entire course duration can be missed. For cumulative absences of more than 30%, the course must be repeated. A confirmation (e.g., a medical certificate) must be provided for the absence.

According to the examination regulations of the WU, important reasons are those which are outside the disposition of the student (e.g., illness, accident, death of a close relative). Professional obligations are not considered as an important reason within the meaning of the examination regulations, because they are in the disposition of the students, and the unit schedule of this course has been communicated well in advance.

This course applies two teaching methods: First, the lecturer introduces key theoretic concepts of economics for managerial issues. Second, ample of hands-on calculation exercises consolidate the students understanding.

The total grade is calculated as follows:

• Class participation 10%
• Home exercises 30%
• Final exam 60%

The final exam covers the contents of the course and relevant literature. At least 50% of the maximum achievable points must be attained for a positive grade.

Students are expected to prepare for each class unit by reading the relevant literature. Home exercises will be given in each class, to be completed until the next class.

It would be advantageous if students would repeat principles of economics (basics of demand and supply, welfare considerations) before attending this course.

The general communication (questions to lecturer and discussions among the group) are supposed to take place in the respective learn@WU forums.

Only in personal matters (e.g., illness) the lecturer can be reached under sonntag@ihs.ac.at. All content-wise communication should take place in the respective learn@WU forums.