This course examines the underlying economics of successful business strategy, including
(i) The sources of long‐run competitive advantage.
(ii) The dynamics of competition and competitive advantage.
(iii) Strategic interactions (competitive and/or cooperative) between pairs of firms.
Three characteristics distinguish our approach. First, we focus on the large strategic decisions which firms face rather than more detailed, operation/managerial issues. Second, we seek broad principles that can be applied across many firms and markets, rather than anecdotal success stories or institutional details that apply only in limited cases or as a result of quite idiosyncratic factors. Finally, we develop these broad principles from the framework of microeconomic theory. As such, potential answers will be subjected to the rigor of economic analysis to test their validity and applicability.
The approach toward teaching and learning is primarily inductive. That is, you will learn the concepts and principles outlined above largely through examples – this is the essence of the case study method. The goal is to carefully study specific business situations and decisions with the goal of extracting broader principles about business strategy, which will then be available to you in a wide variety of managerial contexts. Course time will be split roughly 65/35 between case discussions and lectures.
Good cases are necessarily complex and ambiguous. In preparing for case discussions, you may find sorting through this complexity and ambiguity to be frustrating. The problems presented in the case discussion may not have one correct answer. However, there will generally be a set of insights and solutions that are better than others. And it is in working through the messy details to find these insights and solutions - both in your own preparation and in class discussion - that the concepts and principles introduced in the readings and lectures will come alive and be enriched for you.
Eli Ginzberg Professor of Finance and Economics; Chair of Economics Division
Wouter Dessein is currently the chair of the Economics Division and the Eli Ginzberg Professor of Finance and Economics at Columbia Business School. He is also Editor-in-Chief of the Journal of Law, Economics and Organizations, and an Associate Editor of the American Economic Journal: Microeconomics. Dessein's research interests center on the economics of organizations: the allocation of decision-rights in organizations, the organizational structure...