Managerial Economics and Business Strategy - Michael Baye

About the book

Baye's Managerial Economics and Business Strategy remains the best-selling managerial economics textbook in which it continues to provide students with the tools from intermediate microeconomics, game theory, and industrial organization to make sound managerial decisions. Baye is known for its real-world examples, frontier research, inclusion of modern topics not found in other managerial books, as well as balanced coverage of traditional and modern microeconomic tools. The Seventh Edition retains all of the key signature features of previous editions and incorporates new features to enhance students' learning experiences and make it easier to teach from the book. These include updated headlines, new and updated inside business applications, and new end-of-chapter material.

Key features

Updated Headlines: Updated and current headlines begin each chapter with a real-world economic problem. These problems are essentially hand-picked ¿mini-cases¿ designed to motivate students to better understand the chapter material. By consulting the end of chapter answers (Answering the Headline), students learn basic economic thinking.

New and Updated Inside Business applications: These new Inside Business boxes illustrate real-world applications of theory developed in the chapter; these are drawn from both current economic literature and the popular press.

New end-of-chapter material: Over 25 new problems and applications were added to the Seventh Edition; new material is included at the end of each chapter set so that existing problem numbers match those in the Sixth Edition, making for an easy transition.

Updated Supplements: The new Online Learning Center Web site offers full teaching notes and solutions to Memos for the Time Warner case-plus a host of additional supplements. These include over 10 additional full-length cases complete with expanded teaching notes and links to chapter content, complete solutions to all end-of-chapter problems, an updated and expanded text bank, animated Power Point presentations, chapter summaries, chapter outlines, the Digital Image Library and more.

Focus on Business Strategy: Baye not only provides the Economic Foundations of Business Strategy, but also includes Advanced Topics in Business Strategy. Chapter 13, Advanced Topics in Business Strategy, covers such topics as the economics of networks, predatory pricing, new product pricing, limit pricing, and foreclosure. This chapter better prepares students by covering today¿s issues facing managers.

Full Coverage of the Economics of Information. Managers seldom have full information to guide their decisions. Chapter 12 equips managers with the tools needed to make decisions in environments of imperfect or asymmetric information. Material shows students how screening, signaling, self-selection devices, and incentive mechanisms can be used to mitigate problems caused by asymmetric information (such as moral hazard and adverse selection). The material on auctions also explains the optimal bidding strategies in auctions with both independent private values and affiliated (or correlated) value estimates. Auctions are important for managers to understand, as often firms participate either as the auctioneer or as a bidder.

Learning Objectives: Each chapter begins with clearly identified learning objectives, designed to enhance the learning experience and help implement AACSB¿s mandate to demonstrate student learning.

About the author

Michael Baye is the Bert Elwert Professor of Business Economics & Public Policy at Indiana University's Kelley School of Business. He received his B.S. in economics from Texas A&M University in 1980 and earned a Ph.D. in economics from Purdue University in 1983.

Table of contents

Chapter 1: The Fundamentals of Managerial Economics
Chapter 2: Market Forces: Demand and Supply
Chapter 3: Quantitative Demand Analysis
Chapter 4: The Theory of Individual Behavior
Chapter 5: The Production Process and Costs
Chapter 6: The Organization of the Firm
Chapter 7: The Nature of Industry
Chapter 8: Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets
Chapter 9: Basic Oligopoly Models
Chapter 10: Game Theory: Inside Oligopoly
Chapter 11: Pricing Strategies for Firms with Market Power
Chapter 12: The Economics of Information
Chapter 13: Advanced Topics in Business Strategy
Chapter 14: A Manager's Guide to Government in the Marketplace