Basic Economics for Industrial Engineering - 3GMC0415

The course includes four parts (lectures and tutorials):

• Individual decision-making and collective behaviour.
Discover some of the main problems of risk, strategic interaction, coordination and motivation and how to formalise and theorise these problems by studying different behaviours. In tutorials, firstly students are put in real-life situations (experimental economics) where they must make efficient decisions in various contexts and secondly they must deal with exercises of formalising and case-resolving.

• Market economy and competition.
Discover tools for analysing markets and competition. The aim is to provide basic knowledge on this subject so that students can take efficient action on the markets from a company point of view. Emphasis is placed successively on the structures of competition, the nature of the products traded, the information available and the presence of external circumstances. In structure, students discover the economic instruments allowing them to formalise horizontal and vertical competition: monopoly and oligopoly, barriers at the entrance to activities, alternative products, competition with suppliers and customers. Tactical issues of pricing and product differentiation are highlighted. Public monitoring of competition is also studied. Students will learn about the theory of signalling and filters. Some elements concerning public regulation of information are also presented: standardisation, labelling, marketing authorisations etc… Students will discover to what extent property rights are an incentive mechanism for companies.Examples are taken on the one hand from scarce resources and the environment (negative externalities) and on the other hand from research and development (positive externalities). The main instruments for regulating externalities are presented.

• Organisational Theory.
Present the economic analysis of coordination and motivation instruments, particularly used in companies to help organise design and production processes: contracts, loans and distribution of property rights. Contract Theory is developed within the framework of Agency Theory and then briefly applied to internal company organisation (organisational structure) and external company organisation (subcontracting, franchising). The Contract Theory is also applied to human resource management (job contracts, career development plans), to corporate governance (manager contracts) and to finance. The main principles of contract formalisation and efficient task formalisation are also briefly presented taking into account risk aversion, problems linked to multi-activities or sequenced activities, job autonomy and monitoring choices.

• Macroeconomics.
In this final section, macroeconomics is presented using the tools of national accounts and their aggregates. Variations in price changes, inflation and growth can be distinguished. Tools of macroeconomic policies (budget, currency) are then presented and put into perspective through the context of French and International current affairs.

E1 = Final written exam from 1st exam period
E2 = Written or oral exam from 2nd exam period

N1 = Final mark from 1st exam period
N2 = Final mark from 2nd exam period

N1 = 0,4*CC + 0,6*E1
N2 = E2
Session 2 : Ecrit

The course exists in the following branches:

• Curriculum - Engineer student Bachelor - Semester 5

Course ID : 3GMC0415
Course language(s):

You can find this course among all other courses.

Générale sur l'ensemble du programme :
Joseph Stiglitz, Economics, 3° Edition, WW Norton, 2002.
Décisions individuelles et collectives :
Dixit A., Nalbuff B., Thinking Strategically., Norton, 1991.
Rasmusen E., Games and Information: An Introduction to Game Theory, Blackwell, 2006.
Gintis H., Game Theory Evolving, A Problem-Centered Introduction to Modeling Strategic Interaction, Princeton University Press, 2000.
Pour la concurrence imparfaite et l'économie industrielle :
Church J., Ware R., Industrial Organization: a Strategic Approach, Irwin McGraw Hill, 1999.
Tirole J., Theory of Indusrtrial Orgnazation, MIT Press, 1998.
Carlton D.W., Perloff J.M., Modern Industrial Organization, 3rd ed. Addison-Wesley, 1999.
Mas-Colell A., Whinston M.D., Green J.R., Microeconomic Theory, Oxford University Press, 1995.
Pour l'économie des organisations :
Milgrom P., Roberts J., Economics, Organization, and Management, Prentice Hall, 1992.
J.-J., Laffont, D. Martimort, The Theory of Incentives, The Principal-agent model, Princeton University Press, 2002.
Pour la macroéconomique :
Barel E., Beaux C., Kesler E., Sichel O., Economie politique contemporaine, A. Colin, 2005.