Economics and Business Strategy

Economics and Business Strategy
Licence Économie et gestionParcours International economics and management


This course introduces the basics in economics and strategies and, in particular, proposes an economic approach to strategic questions. It focuses on the main concepts and theories of the field and illustrates them with practical case studies and readings. The course presents different market structures and how they shape and are shaped by firms’ strategies. The focus is mostly on the dynamics of competition and firm interactions. The last section of the course establishes the link between industrial organization and the more recent theories in economics of innovation.

Compétences visées

  • Awareness of the relations between business strategies and economic approaches to industrial organization and innovation
  • Capacity of analyzing and designing business strategies

Modalités d'organisation et de suivi

Plan of the lecture :
Ch1: Basics in microeconomics and game theory (Besanko 1 and 2, CP 2)
Ch2: Perfect competition and monopoly (Besanko 8, CP 3, 4 and 5)
Ch3: Theories of oligopoly (Besanko 8, CP 6)
Ch4: The dynamics of Competition (Besanko 10)
Ch5: Entry and exit (Besanko 9 and 11, CP 11)
Ch6: The make or buy tradeoff: The firm and the market (Besanko 3 and 5, CP, 12)
Ch7: Product differentiation and monopolistic competition (CP 7)
Ch 8: To go further: Economics of innovation (CP 16)

  1. Schumpeterian competition
  2. Intellectual property rights (patents)


  • Sciences économiques
  • Sciences de gestion et du management


Main textbooks

  • Besanko D., Dranove D., Shanley M. and Schaefer S., Economics of Strategy, 5th edition, Wiley ed. Carlton D.W. and Perloff J.M., Modern Industrial Organization, 4th edition, Pearson ed.

Other references

  • Baumol W.J., Panzar J.C., Willig R. (1982), Contestable markets and the theory of industrystructure, New-York, Harcourt Brace Jovanovitch ed.
  • Fudenberg D., Tirole J. (1991), Game theory, Cambridge, MIT Press.
  • Gibbons R. (1992), Game theory for applied economist, Princeton University Press.
  • Nelson R.R., Winter S. G. (1982), An Evolutionary Theory of Economic Change, Belknap Press series.
  • Scherer F. (1980), Industrial Market Structure and Economic Performance, Boston: Houghton Mifflin ed.
  • Schumpeter J. A. (1942), Capitalism, Socialism and Democracy. Stigler G. (1968), The organization of industry, Homewood ed.
  • Sutton J. (1991), Sunk costs and market structure, MIT Press.
  • Tirole J. (1988), The theory of industrial organization, The MIT Press.
  • Williamson O. (1985), The economic institutions of capitalism: Firms, markets, relationalcontracting, New-York, The free press.


Responsable(s) de l'enseignement