Economic strategic thinking, 7.5 ECTS

First level

Description

The aim of this course is to provide an understanding of economic aspects of strategic decisions within companies and organizations. The approach of this course is to illustrate key issues through microeconomic reasoning and simple applications of…

The aim of this course is to provide an understanding of economic aspects of strategic decisions within companies and organizations. The approach of this course is to illustrate key issues through microeconomic reasoning and simple applications of non-cooperative game theory. The main emphasis throughout is on illustrating the central economic principles of each respective application. The course structure parallels the set text in dealing with four areas of strategic decisions. The first area concerns the company’s horizontal and vertical borders, i.e. the scale of the company’s activity and how much of the processing chain that ought to be included in the company. Discussion topics include economies of scale, transaction costs, incomplete contracts, relationship-specific investments and so-called hold-up problems. The second area concerns imperfect competition with reference to such issues as monopoly, monopolistic competition, oligopoly theory, cartels, new establishment and secession. Discussion topics include credible threats, repeated games and obstacles to entry. The third area concerns the company’s competitive advantages and whether these can be sustained in the long-term. This part of the course relates earlier topics to such areas as research and development and product differentiation. The latter part of the course focuses on a company’s internal organization and the incentives within a company. Discussion topics include principal-agent theory, performance-based compensation and the weighing of incentives against risk, incentives in so-called tournaments and incentives in groups.

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Area of interests: Information only in Swedish

Information only in Swedish

Subject

Economics

Stockholm University offers one of the best environments in Europe for research and higher education in Economics. Former students are employed as economists in a wide range of fields, such as national and international organisations, government, business and finance. The Department of Economics at Stockholm University has 30 faculty members. Courses are also taught by researchers at the Instutite for International Economic Studies, IIES, and the Swedish Institute for Social Research, SOFI.

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The Department of Economics offers a two-year Master Programme in Economics as well as a Research Master Programme in Economics, both taught in English. Application is in January/February and courses start in late August or early September. For information see: Master programmes.

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Economics