This document provides instructions for the research/interview term paper. I am providing this to provide more clarification than what is given in the syllabus so that the expectations are clear. This is both expectations regarding the purpose of the paper, content of the paper, and the format of the paper. Hopefully you will see these are all interconnected. Also note that I have slightly altered the grading rubric in the syllabus to reflect these changes.
Purpose of the Paper
The purpose of the paper can be very simply stated. It is to apply a concept from managerial economics to address a real world problem in business by conducting necessary research.
It is important to realize that this paper is not a report on some business topic related to managerial economics. It may be quite different from other papers you have written, and this is likely to be reflected in what is meant by "research" and the other contents of the paper. This is described more fully below.
Content of the Paper
It was stated that the purpose of the paper is to apply a concept from managerial economics to address a real world problem in business by conducting necessary research. Let's break this into its parts.
1. A real world business problem:
You must identify a real world business problem that you think would be interesting to analyze. This could be a problem related to a particular business, a particular industry, or an economy wide problem. I highly recommend choosing a narrowly defined problem. Some examples could be
(i) How did company X incorporate business ethics into their human resource policies?
(ii) Should firms in the X industry increase their price?
(iii) What is the response of company X to an increase in minimum wages?
These are just a few examples. What is important is that your problem be very clearly defined and that it be interesting to you.
2. A concept from managerial economics:
Throughout the term you will be exposed to many concepts, or theories, from managerial economics. These include forecasting, risk analysis, pricing strategies, optimal resources to hire, capital budgeting, game theory, business ethics, etc. One of these concepts covered will be used in your paper to address a problem, or issue, from a real world business situation.
3. Application of the concept to the problem:
A concept, or theory, is a logical framework that allows one to highlight causal relationships between different variables. You then will use that concept/theory to understand the business problem you are studying.
For example, suppose the business problem is the effect of minimum wages. But notice this is not narrow enough. Does this mean the effect on business profits, the effect on employment, the effect on teenage employment, the effect on business investment, etc. As one can see there are many dimensions to the problem. So you need to pick one very narrow dimension. Let us say the business problem is the effect of a minimum wage increase on teenage, part-time employment.
With that as the business problem the concept/theory from managerial economics we need to apply is the concept of marginal resource cost and the firm's profit-maximizing decision to hire resources. And suppose the application of this concept suggests that a firm will reduce its use of unskilled labor and cause a shift to capital investment in the long-run, causing a fall in teenage, part-time employment.
4. By conducting necessary research:
The application of the concept tells you how the variables relevant to the problem are related to each other. That is, it provides the framework to understand the problem. Your research will apply this conceptual framework to the problem with real world data to fully analyze the problem. Depending on the nature of the problem being studied, the research may be investigating the extent to which the conceptual framework is correct, or it may be measuring the impact of one variable on another that the conceptual framework has identified as being important.
For example, in the case of the effect of minimum wages, the concept tells one how minimum wages and employment may be connected, and why they are connected. Your research may investigate the extent to which this is true. Hence you could collect information that will help in determining the extent to which minimum wages cause teenage unemployment. Alternatively you may decide to investigate how one company has planned for increases in minimum wages, including their plans to hire teenage workers.
There are undoubtedly many different types of data to be collected, but for this paper we can say there are two options you have.
(i) The first option is to collect data on the variables of interest from publicly available sources (such as government statistics, industry publications, company reports, journal publications, etc.), and then use this information to apply the concept to analyze the problem. So in our example, you may collect information on minimum wages and teenage employment and use that data to determine the extent to which increases in minimum wages decrease teenage employment. In this case that probably means doing some simple statistical analysis, but it is not necessary to use statistics. In general, you simply need to use this data to help apply the concept to analyze the problem.
(ii) The second option is to use the interview option to ask company executives about the issue at hand. Continuing with the above example, you may ask a series of questions about their strategy for responding to increases in minimum wage, etc. Again, the emphasis is on using these interview responses to apply the concept to analyze the problem.
As you can see, in either case the goal is to collect data/information that will help apply the concept from managerial economics to analyze the problem. Of course, the exact type of data needed, and the techniques needed, will vary with the problems studied.