Prerequisites: "C-" or better in BUS 2011 AND “C” or better in (MATH 1210 OR MATH 1220 OR MATH 1310 OR MATH 1320 OR MATH 1250 OR AP Calculus BC score of 3 or better OR AP Calculus AB score of 4 or better).
This course is the continuation of a survey of the applications of economic analysis to business decision-making. Calculus is a prerequisite and will be used throughout. The first part of the course studies game theoretic models of competition including quantity-choice games, analysis of entry, exit and equilibrium industry structure, and spatial preference and spatial competition. The second part of the course studies principal agent models, introducing ideas of hidden action and moral hazard, participation and incentive constraints, and value-maximizing contracts.