Prof David De-Meza

This course is compulsory on the MSc in Management and Strategy. This course is available on the MPA in European Public and Economic Policy, MPA in European Public and Economic Policy, MPA in International Development, MPA in Public Policy and Management, MPA in Public and Social Policy, MSc in International Management, MSc in Management Science (Decision Sciences) and MSc in Management Science (Operational Research). This course is available with permission as an outside option to students on other programmes where regulations permit.

The objective of the two courses (A and B) is to provide students with a critical appreciation of what it takes to be a strategist - in  the real world, both within and between firms . The critical aspect of being a strategist is to anticipate and prepare in advance for the possible reactions of other players (e.g. competitors). These two courses will help students to understand how managers in the real world ought to read situations from a strategic angle. In particular, strategy is viewed from the perspective of economics. Besides applications, attention will also be given to conceptual underpinnings.

The course is an amalgam of game theory, economics, and strategic management. After some preliminary material on measuring corporate performance, students will be introduced to ideas of behaviour in strategic situations. A powerful tool to study these situations is game theory, where the emphasis is on outplaying a competitor who is trying to outplay you. Some three lectures and two seminars will be devoted to developing the basic concepts of game theory including Nash and sub-game-perfect Nash equilibrium. The second part of the course will focus on applying these ideas to  issues in competitive industries. The third part of the course introduces the concepts of creating and appropriating value, distinctive capabilities and ways to build and maintain competitive advantage. These issues will be deepened further in the accompanying seminars.

20 hours of lectures and 9 hours of seminars in the MT.

D Besanko, D Dranove & M Shanley, Economics of Strategy, John Wiley, 4th Edition.; A Dixit & B Nalebuff, Thinking Strategically: The Competitive Edge in Business, Politics and Everyday Life, Norton, 1998; J Kay, Foundations of Corporate Success, OUP 1995; J Roberts, The Modern Firm:Organizational Design for Performance and Growth, OUP 2007

Exam (100%, duration: 2 hours) in the main exam period.