Introduction -- The problem with Managerial Economics

People tend to find ManEc difficult. Really difficult.

This is an understatement. In fact, some people do not understand the material after literally devoting tens or even hundreds of hours to its study.

It doesn’t have to be like this. There’s no reason for it.

ManEc is undoubtedly one of the toughest classes in MBS’s core curriculum. This is rather odd, because all the course tries to do is teach us a better framework for making decisions. That’s it.

At first glance, it doesn’t seem that hard… we already know how to make decisions, right? Obviously we do. We’re adults, and we’re bright… obviously! Only… it doesn’t work like that. Because although we’ve been making decisions all of our lives, and though most of these decisions turned out well, there might just be a better methodology to evaluate alternatives. Being a rational player, coming up with a best response… these ideas are extremely important, but they aren’t always the easiest to intuitively visualize. In fact, some of the things we’ll teach you won’t make sense… at least not at first.

And therein lies the dilemma in ManEc. In order to properly learn how to better make decisions and better evaluate options, we basically need to unlearn everything our experience has ever taught us about decision making and choosing between alternatives.

This is not easy, and many people have trouble doing this. The stubborn people tend to have the most trouble; ManEc teaches one point of view and leaves no room for others. This is not Managing People; there is usually only one right answer. I wish it were different, but it is not.

So my heartfelt advice is as follows; if you see a concept that initially doesn’t make sense, immediately think of ways how it might. Because in the end, the material WILL make sense, after your brain has a chance to wrap itself around the sometimes convoluted logic. Give your brain the freedom to do this, and you’ll be fine. You might even (gasp!) find the material engaging.

Yes, it is possible. This might actually become one of your favorite classes. It will definitely help you make better managerial decisions :)

^_^