Economics & Finance Course Overview

Course Overview

 

Game Theory

Why do firms cheat? Does Game Theory have accurate predictive powers? Can we predict who win the 2020 American Presidential Election? 

 

Strategy

Is good luck more important than a good strategy? Is Porter’s work useful in shaping the strategy of a business? Should firms bother with strategy or focus on the day-to-day running of their business?

 

Globalization and Supply Chains

Globalization was the key trend of the late 20^th century and the early 21^st Century. Following Covid-19 and increased environmental concern, will de-globalization be the next big thing?

 

Development Economics

Are natural resources beneficial to a country? Do richer countries do more harm than good when intervening in poorer countries?

 

Reading List

 

Game Theory

 

• Economist Reading: Prisoner’s Dilemma. Link: https://www.economist.com/schools-brief/2016/08/20/prison-breakthrough
• Yale Online Lecture. Watch at least up until Lecture 5 and do make notes. Link: https://oyc.yale.edu/economics/econ-159
• (Extra – A Beautiful Mind on Netflix tells the story of one of the fundamental Game Theorists.)

 

Strategy

 

• Harvard Business Review video on Porter’s Five Forces Link: https://hbr.org/video/3590615226001/the-explainer-porters-five-forces
• In Our Time – ‘The Art of War Podcast’. Link: https://www.bbc.co.uk/programmes/b09smh59

 

 

Globalization and Supply Chains

 

• Hertford Responds - a seminar discussing the impact of Covid-19 on supply chains. Link: https://www.youtube.com/watch?v=JDKdBXcMn3k
• In Our Time – ‘The Wealth of Nations’. Link: https://www.bbc.co.uk/programmes/b052ln55
• ‘Are Businesses ready for Deglobalization?’ by Dambisa Moyo Link: https://hbr.org/2019/12/are-businesses-ready-for-deglobalization

 

Development Economics

• Who Dares Wins – China and the World. Link: https://www.bbc.co.uk/programmes/m0009ryt?ns_mchannel=social&ns_campaign=bbc_radio_4&ns_source=facebook&ns_linkname=radio_and_music&fbclid=IwAR0AB5J-U_F7ZdT7xGhy6ej1sLtbZ3yuPLzPDbiNiWY3N7R-Mpz_B_NNUFQ
• The Washington Consensus. Link: https://www.intelligenteconomist.com/washington-consensus/
• The Economist: Dutch Disease. Link: https://www.economist.com/the-economist-explains/2014/11/05/what-dutch-disease-is-and-why-its-bad

 

 

 

 

Brief Course Outline

 

Game Theory (3 sessions)

 

Class 1

• Prisoner’s Dilemma
  • Recap Prisoner’s dilemma
  • Work through a problem
  • What are the real-life applications of this?
• Battle of the Sexes
  • Real world example
  • Solve in pure strategies
  • Solve in mixed strategies
• Iterative Deletion
  • Example and work though
• Prep: problem sheet on Game Theory and research real-world examples of collumsion

 

Class 2

• Go through problem sheet
• Collusion
  • What is it? What does it look like on a diagram?
  • Real world examples feedback
  • Maths: how do we sustain collusion?
• Prep: Median Voter Teorem (Yale online), apply to Johnson 2019 (also consider Starmer) and Biden vs Trump 2020

 

Class 3

• Feedback on research. What criticisms of the model are there?
• Debate: Is game theory relevant? In two groups, 15 minutes to plan and then debate in formal manner.

 

Strategy (3 sessions)

 

Class One

• What is a strategy?
• Porter
  • Generic strategies
    • Are there any counter examples? Can anyone do both?
  • 5 forces
    • Apply to a firm of choice
    • How do they change over the industry lifecycle?
    • Video recap.
  • Prep: research an examples of a good strategy that failure or a bad strategy that succeeded.

 

Class Two

• Feedback on research to groups
• Case studies: Honda and VHS vs Betmax
  • What lessons can we learn from them?
• Prep: Alibaba article and questions

Class Three

• Feedback on Alibaba questions
• Problems with a data driven strategy
• Essay: Is good luck more important than strategy?
  • Discuss what makes a good essay & referencing
  • Time to plan as a group
• Prep: write essay.

 

Globalization and Supply Chains (3 sessions)

Class One

• Justifications for trade
  • Discuss absolute and comparative advantages
  • Plotting PPFs and worked examples
• Introduce free trade diagram
  • Supply and demand and global supply
• Prep: MCQs on AA and CA. Research pros/cons of globalization – talk about how they would arise.

 

Class Two

• Go through MCQs.
• Create table of pros/cons.
• Look at trends of trade.
• Introduce tariff model analysis.
• Prep: research of Zara and Hertford Responds video.

 

Class Three

• Why is Zara so successful?
  • What are they doing with regard to globalization?
  • Why is this happening?
• Feedback on Hertford Video.
• Essay plan: What is the future of global trade?
• Prep: write essay.

 

Development Economics (3 sessions)

 

Class One

• Is global trade beneficial for developing countries?
  • Apply what we know about globalization to this context.
• Theories of Development: Harrod-Domar and Solow
  • Suggests a role for richer countries.
• Prep: resources curse in Chile video and questions.

 

Class Two

• What are the practical flaws in aid?
• Feedback on Chile Video.
  • Are Western countries making the resource curse better or exacerbating the problem?
• What about China’s involvement in Africa? Watch video and discuss.
• Prep: research China’s involvement in Africa. Read FT article on tech companies in Africa.

 

Class Three

• Summary of what China is doing in Africa/tech companies.
  • Are these companies the new colonialists?
  • If not, how do they differ?
• Debate: Would currently poor countries be better off without richer countries intervening?
• Summary roundup – what have you learnt in terms of new content? What have you learnt in terms of new skills?