Department of Decision Sciences & Managerial Economics

Faculty of Business Administration

The Chinese University of Hong Kong

DSME4110 Economics Analytics

(Fall Semester, 2022 - 2023)

INSTRUCTOR

NAME Yuen, Chi Lok Andrew

Office: Room 738, 7/F, Cheng Yu Tung Building, CUHK
Phone: 3943 1968
E-mail:andrewyuen@cuhk.edu.hk
Office hour: By appointment

TEACHING ASSISTANCE

NAME Lau, Cindy

Office: Room 943, 9/F, Cheng Yu Tung Building, CUHK
Phone: 3943 8560
E-mail: cindylau@cuhk.edu.hk

COURSE CONTENT

This course aims to provide economic views on the operations of enterprises for
understanding corporate decision making and strategy formulation. The course is linked to
game theory, the theory of the firm and industrial organization, and information economics.
In particular, emphasis will be placed on the application of economic principles to major
business decisions, including pricing, market entry and exit, strategic use of information and
contract design. Industry analysis and governmental regulation will also be discussed.

COURSE STUDY OUTCOMES

After completing this course, students are expected to:

(1) master measurement of economic variables and their essential relationships in a business
environment.
(2) familiar with tools such as decision analysis, strategic analysis, industry and market
analysis.
(3) use Excel to incorporate data into analytical framework to address issues under different
market structures (such as pricing, entry, vertical integration and etc.)
(4) to identify the legal constraints on the methods a firm can do in seeking profits.

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REQUIRED TEXTBOOK

Economics of Strategy by Besanko, Dranove, Shanley and Schaefer, 7 th Edition, Wiley, 2017.

COURSE ASSESSMENT

Course grade will be based on the following elements:

Group case assignments 15%
Group project 30%
Peer Evaluation 10%
Final examination 35%
Class participation 10%
Total 100%

FINAL EXAMINATION

The final exam will be included materials covered in the lectures, discussion in the classes
and the required readings. There will be multiple choices, short questions and long questions
to assess students’ understanding on fundamental economic concepts, and ability to apply the
concepts to analyze business issues. The final exam will be an individual, in-class and open-
book. Final exam is scheduled on Monday, 5 December 2022 at 10am-12pm in CYT 209A-B.

CLASS PARTICIPATION

Please note that it is “PARTICIPATION” not “ATTENDENCE”. Thus, you are required to
actively participate in the class, which includes class discussions, raising questions and
providing feedback. You will obtain marks in participation by asking pertinent questions or
by responding questions during class. You will lose participation marks by constantly talking
in class or missing a significant portion of the class.

GROUP CASE ASSIGNMENTS

Students are required to form a group with no more than 7-8 students. There will be 2 group
case assignments required for this course; both assignments will be used to compute the final
grade. The objective of the assignments is to make sure you understand how to apply the
economic analytical framework in analyzing business issues. Peer evaluation will be
considered in the grading.

GROUP PROJECT

See the details in the project outline.

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GRADE DESCRIPTORS

Grade Overall course

A Outstanding performance on all learning outcomes.
A- Generally outstanding performance on all (or almost all) learning
outcomes.
B Substantial performance on all learning outcomes, OR high performance
on some learning outcomes which compensates for less satisfactory
performance on others, resulting in overall substantial performance.
C Satisfactory performance on the majority of learning outcomes, possibly
with a few weaknesses.
D Barely satisfactory performance on a number of learning outcomes
F Unsatisfactory performance on a number of learning outcomes, OR
failure to meet specified assessment requirements.

POLICY ON SCHOLASTIC DISHONESTY

The Chinese University of Hong Kong places very high importance on honesty in academic
work submitted by students, and adopts a policy of zero tolerance on cheating and plagiarism.
Any related offence will lead to disciplinary action including termination of studies at the
University. Attention is drawn to University policy and regulations on honesty in academic
work, and to the disciplinary guidelines and procedures applicable to breaches of such policy
and regulations. Details may be found at http://www.cuhk.edu.hk/policy/academichonesty/.

With each assignment, students will be required to submit a signed declaration that they are
aware of these policies, regulations, guidelines and procedures. In the case of group projects,
all students of the same group should be asked to sign the declaration, each of whom is
responsible should there be any plagiarized contents in the group project, irrespective of
whether he/she has signed the declaration and whether he/she has contributed directly or
indirectly to the plagiarized contents.

For assignments in the form of a computer-generated document that is principally text-based

and submitted via VeriGuide, the statement, in the form of a receipt, will be issued by the
system upon students' uploading of the soft copy of the assignment. Assignments without the
properly signed declaration will not be graded by teachers. Only the final version of the
assignment should be submitted via VeriGuide.

The submission of a piece of work, or a part of a piece of work, for more than one purpose
(e.g. to satisfy the requirements in two different courses) without declaration to this effect
shall be regarded as having committed undeclared multiple submission. It is common and
acceptable to reuse a turn of phrase or a sentence or two from one’s own work; but wholesale
reuse is problematic. In any case, agreement from the course teacher(s) concerned should be
obtained prior to the submission of the piece of work.

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COURSE SCHEDULE
This is just a tentative course schedule. It may be adjusted during the semester according to teaching
progress.

Week A B Topics Chapter

Week 1 5 Sep 8 Sep Introduction + Review in Economic Analysis Primer
Week 2 12 Sep* 15 Sep Horizontal Boundaries 2
(No class)
13 Sep Reference: L. and D. Epple, “Learning Curves in
Makeup Manufacturing,” Science, 1990 (February), 920-924
Week 3 19 Sep 22 Sep Vertical Boundaries and integration 3 and 4

Case: Fashion Design in GVC

Group project milestone: Group formation
Week 4 26 Sep 29 Sep Competitors and competition 5
Week 5 3 Oct 6 Oct Commitment 7

General concepts in design thinking and

computational thinking
Group project milestone: Company Chosen
Week 6 10 Oct 13 Oct Case: Integrating in GVC: PROTECH

Week 7 17 Oct 20 Oct Entry and Exit 6

Case: Hong Kong Express

Group project milestone: Problem identification
Week 8 24 Oct 27 Oct Industry analysis 8

Case: ZA Bank

Group project milestone: Project meeting I

Week 9 31 Oct 3 Nov Strategic Positioning for Competitive Advantages 9

Review of Business Proposal writing skills

Week 10 7 Nov 10 Nov Government policy and regulations on business (I)

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 Case: Greater Bay Airlines entering Hong Kong
Market

Week 11 14 Nov 17 Nov Government policy and regulations on business (II)

Case: TMall and Anitrust Law in China

Reference:
Hong Kong Legislative Council Brief, Competition
Bill, CITB CR 05/62/43,
http://www.legco.gov.hk/yr09-10/english/bills/brief/b
35_brf.pdf

China Antitrust regulation

http://english.mofcom.gov.cn/article/policyrelease/
Businessregulations/
201303/20130300045909.shtml

18 Nov (4:30-6pm) Industry Talk (Venue to be confirmed later)

Week 12 21 Nov 24 Nov Impacts of Technology on Business (II)
Group project milestone: Project meeting II
Week 13 28 Nov 1 Dec Case: Sensetime

Review and Final Presentation

Group project milestone: Final Presentation
Week 14 5 December (10am-12pm) Final examination
*12 Sep is public holiday and makeup class to be scheduled on 13 Sep 5:30-8:15pm in CYT 202.