Microeconomic Management and Policy (MMP) is a core module on the Certificate stage of the MSc EMP programme. For some people taking this class, this will be the first class you study on the Programme. If you are in that category, the tutors offer you a very warm welcome to the Economic Management and Policy masters degree.
For many, though, this will be your second or later class. We hope you enjoy it, and get at least as much from it as your previous class or classes. 

A few words are in order about what you will cover here in MMP. After this "Introduction" lesson the next Topic (Topic 2) is called Fundamental Principles of Microeconomics. If you have taken an economics degree before, much of this material may be familiar, and you should be able to read through this Topic very quickly. For those without an undergraduate economics background, I believe you will also find this material relatively straightforward. Some of it resembles what you may have covered in preparatory reading before you enrolled on the Programme. We shall cover here a number of basic concepts including:

• limited resources, scarcity and choice
• the idea of a market mechanism
• the advantages of specialisation and trade

Topic 2 also goes through some basic ideas about production and costs. You will find that the level of detail and the degree of complexity begin to increase here. We pay particular attention to scale and scope effects on cost. Many of these ideas will be taken up and developed further in later classes in the programme, particularly the elective classes in the Diploma stage of the Programme.
Finally, the ideas of efficiency and optimality are explored and explained, and we examine the ways in which markets can - under certain circumstances - bring about efficient outcomes. However, markets can also fail bring about efficient outcomes, and so Topic 2 ends with an examination of 'Market Failure'.

Topic 3, which covers about two fifths of the whole MMP class, looks at the so-called New Institutional Economics, an area of much research activity in recent years. It extends the price theoretic model of economic behaviour to consider the roles of "institutions" such as law, property rights, contracts and organisations in shaping economic behaviour. The various conceptual tools which economists have developed to make such an analysis possible are surveyed and the usefulness of these tools is illustrated by examples drawn from the fields of economic development, and business and environmental economics.

The class concludes (in Topics 4, 5 and 6) with a study of Game Theory. We apply the tools and techniques of game theory to issues relating to economic management and organisation, strategic decision making, oligopoly, and bargaining. As will be explained further below, some flexibility has been built into this class by making the final topic (Topic 6, on Bargaining) optional. If other commitments prevent you from keeping to the recommended study timetable, this element of slack will be valuable to you.

2. Intended Learning Outcomes  

The contents of this page are an extract from our degree regulations, an internal document for Quality Control purposes. Hence, the rather formal langauge.

(a) Knowledge and Understanding

On completion of this class, participants should understand, and be able to apply to economic issues:

• A set of fundamental principles and concepts of microeconomics, including

1. efficiency and optimality
2. market mechanisms and the conditions under which they can bring about efficient outcomes
3. the concept of market failure; causes and consequences, and possible solutions to market failure.

• The significance, in shaping economic behaviour and policy, of:

1. property rights
2. transaction costs
3. bounded rationality
4. asymmetric information
5. incomplete contracts
6. strategic interdependence and strategic behaviour

• The strengths and limitations in various contexts of analysis based on:

1. The Coase Theorem
2. Transaction Cost Economics
3. Agency Theories
4. Incomplete Contract Theory

• The fundamentals of Game Theory. In particular, participants will develop an understanding of:

1. 2 player games, dominant strategies and Nash equilibrium
2. Mixed strategies
3. Dynamic games
4. Repeated games
5. Game theory applied to oligopoly market behaviour.

(b) Practical Professional Skills

On completing this module participants will have:

1. further developed an analytical approach to understanding society
2. gained experience in the ways in which the results of economic analysis can be presented to policymakers
3. further developed their ability to communicate and discuss economic ideas with peers
4. further developed their skills in the use of library and web-based resources
5. further developed their ability to research a topic and write a report on it
6. further developed their ability to be reflective about learning and in monitoring progress in understanding.

3. Study and Learning Methods: Achieving the Intended Outcomes 

This Open Learning Microeconomic Management and Policy (MMP) class employs a package of learning resources to support the achievement of the learning outcomes:

• The lessons constitute the central framework for the class and present the concepts and methods of analysis fundamental to the attainment of the learning outcomes. These lessons are very close substitutes for the class lectures around which the learning of full-time and part-time students is structured. The lessons content closely follows the verbal delivery in those lectures, but is rather more extensive.  
• Lessons are sometimes (but not always) accompanied by PowerPoint slide show presentations, identical to those used by your tutors in their lectures to FT and PT students. You will notice that some of the individual slides from those presentations are embedded as graphics in the Moodle based lessons. This is done partly as an orientation device for you; should you wish to watch a slide show on screen while simultaneously flicking through the pages of the printed version of this class, these embedded graphics help you keep track of the "matching" between the lessons and the PowerPoint presentations.
• As with many other classes on the MSc EMP programme, MMP is very dependent on the additional reading we recommend that you do. That reading fleshes out the basic ideas, gives a variety of applications, and presents a variety of perspectives hinted at in the lessons. So it is vital that lesson material is supplemented by further reading of the professional literature. This is particularly true for Topic 3 (on the New Institutional Economics); some Topics however, are entirely self-contained, and in those additional reading is not required.
• At each stage of this class, you will be given clear pointers about what additional reading you are recommended to do (if any), and how you can locate the references we quote. In any advanced level class like this you must exercise your discretion in how much of the recommended reading you do. Suggestions about how to make sensible choices in that regard will be given out as you go along.
• Tutorialsare a very important component of the learning package in this class. Clearly, in the absence of actual face-to-face contact in small groups on a regular timetabled basis, conventional tutorials cannot be used. Our substitute is the Discussion Forumfacility (called more simply Forum from now on). Our experience suggests that these Forums can do everything that tutorials can, and at least as well if not better. The ways in which we hope you will use Forums are discussed at length on the next page. 
• Finally, the formally assessed module assignments have been carefully designed so that they enhance your learning (in addition, of course, to giving you and us feedback on your performance). Typically, these assignments involve the application and evaluation of an analytical approach to a policy issue. One of the assignments also provides an opportunity to research a topic in depth using library and web-based materials.
• It is very important that you read through two of the Resources available as linked documents on the main page of the MMP class.

4. Interactive Learning  

The use of the Forum facility was briefly mentioned on the previous section. This is one component of a set of devices which make the learning process interactive. As you work your way through the lessons in MMP, there will be a variety of "tasks" you are asked to carry out at specified points in the lesson materials. These mainly fall into five categories (I say mainly because there are some exceptions). For those who have already taken the DHA class, please note that the instructions about where to post your answers to the tasks differ a little from those given for DHA class.

The five categories are:

1. Check Your Understanding  questions: these arise when we wish to help you check whether you have understood a particular concept or idea. Often this type of question is framed within a multiple-choice format. That is, a set of answers is given: you choose what you think is the correct answer - and we tell you if you are right. Whenever possible - and where your response was incorrect - we try to explain why you might have arrived at a wrong answer. Generally, the correct response is accompanied by an outline of why this particular response is the correct one. For these tasks, we do not ask you to post your answers to a Discussion Forum. You should contact your tutor should you not understand why your answer was wrong. 

2. Reflective Questions: these arise when some general concepts have been covered, and where the material tends to be rather complex. We want you to "pause" from time to time to ponder over (i.e. reflect upon) what you have just read, and so to think about it more carefully or in a different way. For these tasks, we ask you to post the outcomes of your reflection to a particular Discussion Forum. This will usually be available via a hyperlink on the question page. Your tutor will be moderating these responses on a regular basis, and will usually post some summary comments or suggestions to that Forum at an appropriate time. All responses to these Reflective Questions will be available for all in the class to view.

3. Exercises: These arise when some complex material or techniques have been covered. Again, we want you to "pause", reflect on what you have just read and practice using the ideas or techniques being considered. Sometimes the Exercise is short and simple. But more often it is reasonably complicated, often in several steps. For these tasks, we again ask you to post the outcomes of your reflection to a particular Discussion Forum. As with all postings to forums, your tutor will be moderating these responses on a regular basis, and will usually post some summary comments or suggestions to that Forum at an appropriate time. All responses to these Reflective Questions will be available for all in the class to view. The tutor may also contact individuals privately about their postings when he or she thinks that would be useful to you.

4. Discussion Questions: these are the most similar of our various "task" formats to what happens in tutorials for those studying by an in-attendance mode. They will often involve each member in the class - or in a group within that class - doing some substantial preparation and then sharing his or her ideas with colleagues. Discussion of the various inputs is central to what goes on here. Responses should be posted to the appropriate Forum. We ask each of you to comment on postings and contributions of others. The tutor will play an active role in this too.

5. Tutorial Exercises: We expect every participant in MMP to submit answers to most of these exercises to the appropriate Discussion Forum. You should also read and - where appropriate - comment on the postings of others.  Further information about these Tutorial Exercises and exactly which ones we require you to submit is given in the Resource: 'Assignments and the management of your time.' A very important thing to bear in mind about these exercises is that they are used for Examination Exemption purposes. If any participant makes a decent attempt at these exercises, then (subject to the condition that an average mark of 60% of more is achieved in the two assessed Classwork Assignments) he or she will be exempt from the requirement to sit a Final Examination in MMP. Again, this is spelled out more fully in the Resource mentioned above. With these Tutorial Exercises, I do want members of the class to see what others have written. So once again we ask you to post your initial thoughts/proposed solutions to the appropriate Forum, and to discuss those of others, should you see fit. You will have a chance to resubmit later should you wish (so there is no penalty in being a first mover).

Please always bear in mind the following two points:

• It is very important for all types of task to attempt the task on your own first. You will learn a lot more this way than by reading others' answers first and then composing your own response. 
• You are free to start a new discussion yourself on any matter you wish, either by creating a new Forum or by starting a new Discussion within an existing Forum.

All of these techniques are designed to help your understanding and your learning. So they are a very important component of the learning package in this module. Their role in this class is explained further below. They give the opportunity to clarify and develop understanding of, and facility with, the analysis developed in the on-line class materials. Some of these formats will also provide the opportunity to see the implications of different perspectives on economic issues and to practice writing for different audiences. They provide the opportunity to practice research skills and to interact with peers taking the module. Finally, they provide an opportunity to explore the use of concepts in the context of possible pathway specialisations that you may intend to pursue.

Taken as a whole, these activities should allow you to demonstrate

• an analytical approach to understanding society
• an awareness of the requirements in presenting economic analysis for a policy audience
• ability to communicate and discuss economic ideas with peers
• competence in the analytical material relevant to the issues discussed
• an ability to select relevant theories and models and make use of evidence

5. Reading materials  

Given the fact that you are studying the MMP class in Open Learning mode, we have endeavoured to make the materials available to you (those available directly through these Moodle web pages or as online downloadable documents) as complete and self-contained as possible. It is not necessary, therefore, to purchase any additional textbooks or other materials for this class. 

Having said that, in the Full-Time and Part-Time modes of study, students are asked to use books or journal articles that are available in the University Library but only in hard copy format. That is, they are not available electronically. We have chosen to leave references to some of these items in the lists of additional reading for Topic 3 only (on the New Institutional Economics). I have done this for two reasons:

1.  I hope that it may be possible to get some of these available online before this class finishes, and will notify you as and when that happens. 
2. For completeness of referencing. Occasionally, there are seminal books or journal articles that should be pointed out to students in our "Further Reading" lists. There may be other ways you could access some of these.

The rest of this page gives some specific information about "Additional Reading" and/or "Recommended Textbooks" for the various Topics in the MMP class.

Topic 2: Fundamental Principles of Microeconomics

This topic is entirely complete and self-contained. No Additional Reading is suggested, nor is there any textbook that supports this material. I do, though, make extensive use of a Glossary. You will see when an item has an entry in the MMP Glossary as it will appear as a greyed word or phrase. Clicking on that term will take you directly to the Glossary entry in question. Extensive use of the Wikipedia encyclopedia  is made for glossary entries. I have "quality controlled each" Wikipedia link made in this glossary, but given the interactive nature of that online encyclopedia, there can be changes taking place in content at any time. This is an excellent resource, though, and I am sure you will find it to be so too.

Topic 3: The New Institutional Economics

There are many references made in Topic 2 to three particular textbooks:

• Brousseau, E and J-M Glachant (2002), The Economics of Contracts. Cambridge University Press.
• Rickets, M (2002), The Economics of Business Enterprise, 3rd edition, Edward Elgar.
• Furubotn, E G and R Richter (2000), Institutions and Economic Theory: the Contribution of the New Institutional Economics. The University of Michigan Press, Ann Arbor. (First Paperback Edition)

The first two of these are available electronically as e books via the University Library. This is not an ideal arrangement, as the books have to be borrowed electronically for short periods of time (typically a few hours at one go), there are some limits on how many people can borrow at the same time, and because there are stringent copying limitations. But this system does at least make the two texts available to you. To access these e books, you should go to the Library web pages, open the Library Catalogue, locate the text, and then follow the procedure specified there to borrow the e book. Note that to do this you must have completed Registration and been issued with a Library Online Access password.

The Furubotn and Richter text is not available as an e book, unfortunately. However, the two other books listed above are very good substitutes. And I shall provide you with other references available online where particular material in Furubotn and Richter is not covered - or is not covered well - in either Brousseau and Glachant or in Ricketts.

Topics 4-6: Game Theory and Applications

This material is entirely complete and self-contained. We have, for several years, recommended to our FT and PT students that they do buy or otherwise obtain a textbook. The following are recommended:

However, our experience has been that very few students find that any textbook is particularly useful, and the staff are likely to drop this recommendation next year. So while the above-mentioned texts are  probably the best books on game theory at a level suitable for this course, their added value is rather low. I suggest that you do not purchase any textbook on game theory, unless you can find one cheap through a used book seller. Instead, if you do find any topics difficult - or find bits of them difficult - please use the Discussion forum to ask your fellow students and tutors for help, advice and so on. For example, we may be able to point you to some other publicly-available web resources if you do feel the need for additional reading, and I expect that your fellow students will post to the Fora any addresses of useful additional material that they come across in their searches.

6. Assessment  

Subject to a qualification to be explained later on this page, there are two assessed elements in this class:

Class Assignments 

There are two formal Classwork Assignments for this MMP class that all students are required to prepare for assessment purposes. The two assignments, collectively, will count for 50% of the final mark for the module.

Examination

The examination in MMP will be of two hours duration with two questions to be answered from a choice of six questions. One of your answers must be to one of 3 questions set on the New Institutional Economics. The other answer must be to one of the 3 questions set on Game Theory and its Applications.
The examination will contribute 50% of the final class mark.  

Exemption from the Examination in MMP.

An Examination Exemption system will be operated in this running of the MMP class. This will be based on submission of the Tutorial Exercises throughout the class. Any person who completes these Tutorial Exercises to a satisfactory (60% +) standard overall will be exempted from the requirement to sit a Final Examination in MMP, provided that the individual in question has achieved an average of 60% or above in the 2 assessed Classwork Assignments.

If you ARE exempted from the Examination, then your final mark for MMP will be based on the simple average of the marks for the two formal Classwork Assignments.
Please note that any class participant who does not attain 60% or above on average in the two assignments and/or does not make a decent attempt overall at the tutorial Exercises must sit a Final Examination that will take place not later than one month after the MMP class finishes. Where an Examination is necessary, your tutor will arrange a time and date for the Examination with you individually.

If you ARE NOT exempted from the Examination, then your final mark for MMP will be obtained as follows:

• 50% weighting from the simple average of the marks for the two formal Classwork Assignments.
• 50% weighting from the Final Examination Mark. Details of when and how the examination would be implemented will be provided to you later individually. You will also be given further information, well in advance of the examination, relating to the examination structure, its rubric, and the type of questions that will be set.

Module Specific Assessment Criteria

Written Classwork Assignments

The first written assignment should demonstrate an ability to utilise the economic concepts and modelling approaches covered in the first 3 Topics of this class (and in particular in Topic 3, the New Institutional Economics) in evaluating a policy proposal or analysing a policy issue.
In the course of doing this there should be evidence of

• the use of library and web-based resources to research a topic
• presentation of relevant evidence and arguments in a coherent and structured form
• ability to reach a conclusion based on appropriate economic analysis

The second assignment will be less discursive in nature, and will ask you to demonstrate your competence in applying game theory concepts and solution methods to a number of hypothetical problems.

Examination

The final exam performance should demonstrate an understanding of

• the significance, in shaping economic behaviour and policy, of the economic concepts discussed in the class
• the strengths and limitations of the analytical approaches covered in the module for the analysis and development of policy.