Markets, Organization and Corporate Strategy


Course Objectives:

This course focuses upon the strategic aspects of management decision-making. It shows how economic reasoning can inform and develop insights with respect to strategies that are necessary for a firm to deal successfully with its external and internal operating environment. The course draws from recent work in industrial organization, transactions cost economics, economics of organization and the modern strategy literature. It illustrates the central role of strategic decision-making in determining a firmís success. Topics covered include the determination of the vertical and horizontal boundaries of the firm, strategic commitment, dynamic pricing rivalry, entry and exit and the origins, creation and maintenance of competitive advantage.


The required text for this course is The Economics of Strategy by D. Besanko, D. Dranove, M. Shanley and S. Schaefer Third Edition, 2004), Wiley (referred to as BDSS hereafter). All students are expected to have access to BDS.


There will a take home mid-term test, a short research paper/case study and a take home final exam.

Course Syllabus:

A Preliminary List of Topics: for details see the BlackBoard website at


1. Introduction: Economic Concepts Relevant to Strategic Decision-Making

2. The Horizontal Boundaries of the Firm

3. The Vertical Boundaries of the Firm

4. The Transactions Costs of Market Exchange

5. Organizing Vertical Boundaries

6. Diversification

7. Competitors and Competition

8. Strategic Commitment

9. The Dynamics of Pricing Rivalry

10. Entry and Exit

11. Industry Analysis

12. Strategic Positioning for Competitive Advantage