INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE
Post Graduate Programme in Management
Course Outline
Course Code and Course Title PGP 105: Organization and Market Economics
Course type Compulsory
Pre-requisites (if any) NIL
Course Credit 3
Total No. of Sessions 24
Session Duration 75 minutes
Term I
Year and Batch 1st Year 2021-22, PGP25
Sections (if any) ALL
Instructor(s) Dr. Kausik Gangopadhyay, and Dr. Chitwan Lalji
Contact Details Dr. Kausik Gangopadhyay: 0495-2809118;
kausik@[Link]
Dr. Chitwan Lalji: 0495-2809251;
chitwan@[Link]
Office Dr. Kausik Gangopadhyay: Faculty Block 1, Room
No. 18
Dr. Chitwan Lalji: Faculty Block 2, Room No. 13
Consultation Hours By email appointment
Introduction
Organization and Market Economics outlines how individual economic units—firms and
households—and other organizations make decisions. Individual economic units interact among
themselves within the framework of an institution known as Market, which is the most prevalent
economic institution in today’s world. Market in its pristine form can generate efficient allocation
of resources along with ensuring the greatest level of overall welfare. However, instances of
failures of this institution, commonly called market failure, have been widely documented in the
past few decades. Widespread market failures have heightened the focus on other forms of
economic institutions, such as the Government. Analysis of these institutions necessitates
different tools including the ones of game theory, which have been refined and applied to the
understanding of strategic interactions in diverse domains. Deeper study into these institutions
leads to the study of the economics of incentives and information. This nuanced thinking enables
a learner to have a better grasp of the complex economic environment of contemporary business.
Learning Outcomes/Course Objectives
At the end of the course, the students should be able to
● appreciate the formulation of a problem in a market environment
● appreciate the necessity of organizations beyond market
● apply various economic models to the analysis of concrete business situations
Textbooks and Learning Materials
Text Book(s)
Pindyck, R.S. and Rubinfeld, D.L. (20179), Microeconomics, 8th edition, Pearson Ltd. [PR]
Reference Book(s)
The Economy: The Core Team, Oxford University Press, 2017 (Oxford, UK) [CORE]
Additional Reading(s)
Electronic copies of relevant additional reading materials will be distributed as and when required.
N. Gregory Mankiw, Principles of Microeconomics, 8th edition, Cengage Learning Custom
Publishing, 2016.
David M. Kreps, Microeconomics for Managers, 2nd edition, Viva Books, 2011.
Technology and Software (if any)
NIL
Other Resources (Journals, Internet Websites) (if any)
NIL
Pedagogy Used/Learning Process
This course uses a variety of pedagogical tools such as lectures, discussions, real-life examples,
classroom experiments, exercises, videos, etc. to achieve its learning objectives. The instructors
expect the students to participate actively in the class. Students are expected to come prepared
in the class with the textbook readings, caselets or other assigned materials and participate in the
critical evaluation of the topics discussed.
Evaluation Components/Assessment of Student Learning
Assessment Tool Percentage Description
Quiz 25% These components are required to check and
evaluate students’ understanding of
microeconomic concepts and application of these
End-term Examination 50% concepts in solving managerial decision-making
problems.
Class Participation 25% Students are expected to work in teams or
individually for the classroom experiments and
exercises that provide them opportunities to
participate in actual microeconomic decision-
making problems and critically explore diverse
perspectives in arriving at their solutions.
Session Plan
Session Module Topics Chapter No. / Reading
material / Cases
1-2 Market Introduction to Market: Demand [PR] Chapter 2 (pp. 45-69,
Economics and Supply; Market Efficiency; 84-87), Chapter 4 (pp.
Elasticity of Demand 148-159)
3-5 Scarcity and Choice: Consumer [PR] Chapter 3 (pp. 91-
Choice; Labour-leisure Choice 122, 130-133), Chapter 4
(pp. 135-148, 168-171)
6 Choice and Uncertainty: Risk [PR] Chapter 5 (pp. 173-
and Preference towards Risk; 188, 211-13)
Risk Mitigation
7-9 Production and Optimal Choice of [PR] Chapter 6, Chapter 7
Inputs: Production Function; Law of (pp. 243-270, 284-286 )
Diminishing Returns; Long Run and
Short Costs of Firm
10-12 The Competitive Markets: Price- [PR] Chapter 8, 9
taking Behaviour; Profit
Maximization; Analysis of
Competitive Markets; Competitive
Labour Market Equilibrium
13-14 Organization Market Failure: Externalities [PR] Chapter 18
Economics and the Role of Government;
Coase Theorem; Public
Goods
15-17 Market Power: [PR] Chapter 10, Chapter
Monopoly; Rent-seeking 11 (pp. 407-427, 442-444)
Behaviour; Price Discrimination
18-20 Social Interactions: [PR] Chapter 12 (pp. 452-
Prisoner’s Dilemma; Nash 461, 479-481), Chapter 13
Equilibrium; Competition and (pp. 483-512, 521-524)
Cooperation; Sequential Games
and First-mover Advantage
21-22 Information Asymmetries: [PR] Chapter 17
Adverse Selection; Moral Hazard
23-24 The Networked Economy: [CORE]
The Innovation Process; Capstone Unit
Matching Markets 21 (pp. 963-992)
Additional Instructions (if any)
NIL
