Bruce Carlin

Managerial economics deals with the application of microeconomic concepts for managerial decision making. The course covers market determination of prices, the impact of government interventions in markets, demand analysis and company pricing and output decisions to maximize profit, the short- and long-run profitability of companies under different market structures, game theory and strategic decision making, and the role of incentives in an organization.

This course examines the investment, financing, and related policy decisions faced by a corporate financial officer. We will study several frameworks for evaluating corporate projects that expand on the capital budgeting issues developed in the core finance course. In particular, we will develop techniques for assessing projects with inherent flexibility (real options). We will also examine the interaction between investment and financing decisions, and how capital structure affects firm value. The final part of the course examines other important topics in corporate finance such as payout policy, risk management, and corporate governance.

This course is about learning to think like a game theorist and developing a systematic way to evaluate strategic problems. Emphasis is on real-world applications and in-class business exercises.