Economics for Business
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Teaching economics to undergraduate Business Management Students at the University of Birmingham
Fiona Carmichael, Birmingham Business School
Published October 2012
Teaching economics to Business students has many challenges. I found this out after a move from teaching on an economics programme at Salford University to teaching economics on a business programme at Birmingham University. At Birmingham many of the UG Business Management students have been exposed to pre-university economics in one form or other, indeed many have ‘A’ level Economics but they have made a conscious decision NOT to study economics. As such this can be interpreted as a signal they don’t want, or don’t expect us to teach economics in a traditional, mainly abstract way. Consequently the existing economics content of the UG Business Management programmes at Birmingham represent and adaption to the overall UH programme and the students on it.
Some adaption is required since, as discussed in Judith Piggot’s 2010 case study economics modules taught to non-economists can be both unpopular and unsuccessful. This resulting adaption has sometimes resulted in what most economists would perceive of as a dilution in terms of the analytical content. To address this potential weakness, the level 2 (intermediate) and level 3 (Advanced) Business Economics modules were revised two years ago to provide a strong analytical focus whilst maintaining consistence with an overall remit to provide a contextual backdrop for the students.
The largest set of revisions made were those relating to the level 3 Business Economics module. This had previously been topic based, focussing on the political economy of globalisation. The current module maintains a case study focus in semester 2, but in common with the level 2 Business Economics module, semester 1 has a more theoretical focus: game theory; externalities; risk; asymmetric information. However, the mathematical content is low and the analytical content is constrained by students’ prior knowledge. In line with the commitment to context, the taught theory is set within a broad managerial economics framework and examples are used extensively. The pedagogical approach is in part issue orientated (Grimes et al. 2009) with theory linked loosely to topic areas e.g. oligopolistic markets, public health, the sports sector, labour markets and education. A number of industry and sector case studies are also discussed during small group sessions. These are linked to theory discussed in the lectures (e.g. entry deterrence, credible threats, collusion, moral hazard) with a view to highlighting real world relevance.
To date the module has proved popular and the students generally score well.
The recommended text for semester 1 is: Allen, W. B., Weigelt, K., Doherty N. A., & Mansfield, E. 2012. Managerial Economics 8th edition. Norton
A supplementary text suggested to keen students is: Kreps, D. M. 2004. Microeconomics for Managers. Norton
The linked slides provide examples of lecture content for semester 1 of this module. Comments and suggestions are welcome.
Grimes, P, Register, C. and Sharp, A. 2009. Economics of Social Issues, McGraw Hill
- A: Introduction, Advanced Business Economics, Semester 1 2012-2013
- A1: Section introduction
- A2: Monopoly and oligopoly (revision)
- A3: Nash equilibrium (some revision)
- A4: Strategic competition and collusion (one-shot Prisoner's Dilemma)
- A5: Prisoner's Dilemma and trade
- A6 i: Strategic competition and collusion (repeated Prisoner's Dilemma)
- A6 ii: Sustaining collusion in particular markets - swing producers - league sports - many firms
- A7: Entry barriers and entry deterrence - sequential games analysis
- A7: More sequential move games - centipedes and reputation
- B1: Section intro (intro to externalities)
- B2: Externalities in sports
- C1: Intro to risk and asymmetric information
- C5: Application: Adverse selection and moral hazard in the finance and supply of health care