COMM 394: Economics and Business

Course Outline

- 1 -
COURSE INFORMATION
Division: Operations and Logistics Term/period: Fall 2014
Instructor: Robin Lindsey Teaching Assistant: None
Email: robin.lindsey@sauder.ubc.ca
Phone: 604 822 3323
Office hours: Henry Angus 470 Monday 13:00-14:00, Thursday: 10:30-11:30 or by appointment
Section number: 101 ... Class meeting times: MW 10:00 - 11:30
Section number: 102 ... Class meeting times: MW 11:30 - 13:00
Course duration: Sept. 3 - Dec. 17, 2014 Classroom location: Henry Angus 243
Pre-requisites: One of Comm. 295, Econ 201, Econ 301
Tutorials / labs: None
Course website: Course notes and some readings will be posted on CONNECT.


COURSE DESCRIPTION
Some government policies that significantly affect businesses are best understood as efficiency-
enhancing responses to what economists call market failures. Other policies are motivated more
by concerns about fairness or equity, and yet other policies have a mixed efficiency/equity
rationale. In this course we will explore both the economic efficiency and equity objectives and
assess how they ultimately determine the so-called public interest. We will also consider how a
government's efforts to advance the public interest can be influenced by voting imperfections
and by the self-interests of elected politicians, government bureaucrats and business people.
Content and Organization: The course will begin by developing a conceptual framework for
policy analysis, drawing on relevant ideas mainly from economics. This will be supplemented with
a look at ethical/equity/distributional issues followed by the various reasons why governments
may fail to act in the public interest. We will then examine corporate social responsibility, and
complete the lecture material with applications to industrial organization, environment policy and
externalities.
Although the course material is primarily conveyed in lectures, class participation is important.
Much valuable material is contributed by students particularly through six public policy debates
in which all students must participate. Debate rules and topics are described in a separate
document on CONNECT.
Course Notes: Lecture notes will be posted on CONNECT before each lecture. Before each
lecture you should either print the notes or bring your laptop and view the notes on screen. You
can supplement the lecture notes with your own notes during class. NO course notes will be
posted for classes pertaining to the debates, so you are strongly advised to take your own notes
during those classes.






COMM 394: Economics and Business
Course Outline

- 2 -
LEARNING OBJECTIVES
During the course you will:
Learn about the Canadian business environment and various public policy issues of
relevance to Canadian business today
Learn basic economic concepts and ethical principles in order to develop a framework
for analysis of public policy issues, taking into account both economic efficiency and
fairness/equity
Gain an appreciation of the often conflicting perspectives that shape government policy
due to the fact that there are typically both winners and losers from any proposed policy
Be able to evaluate the appropriateness of particular business decisions based on
important philosophical approaches to business ethics


ASSESSMENT
SUMMARY
Midterm Exam 25% Tues. Oct. 7, 6:30-8:00pm, Henry Angus 234, 254, 295.
Team Debate 20% Half the debate mark is for the written summary of
arguments, and half is for performance in the debate.
Class Participation 10% Half the participation mark is for attendance,
and half is for participation during class.
Final Exam 45% 2 hours. Time & place to be decided by university.
The final exam will be cumulative, but with
emphasis on post-midterm material.

DETAILS
A particular distribution of grades (e.g., a normal distribution) will not be imposed. Average grades
for the course will follow the Grading Guidelines of the Sauder School. For 300-level courses the
recommended average grade is 75%. The average grades in each of Sections 101 and 102 for
the midterm and final exams may deviate somewhat from this average depending on the difficulty
of the exam and class performance. The distribution of final grades requires approval by the
Sauder School. Grades will not be released by the instructor.
If you want your midterm exam to be regraded you must explain the reasons in a written request.
Regrading involves reviewing the whole exam, and it is possible that your grade will decrease.
Grades will NOT be changed unless an error has been made in grading. So as to be fair to
students who do not request a regrade, small increases in grades based on judgment calls will
NOT be made.
The written summary of arguments for the debates will be graded by the instructor. The
performance of each team during the debate will be graded by the class. It is therefore important
for everyone to attend the debates and to remain attentive.


COMM 394: Economics and Business
Course Outline

- 3 -
COURSE RESOURCES AND MATERIALS
Reading Materials:
The required text for the course is: James A. Brander (2014) Government Policy Toward
Business, Fifth Edition (Toronto: John Wiley and Sons, Canada)
Other Learning Resources: See use of CONNECT above
Technology Requirements: None
Activity Fees: None

CLASS PARTICIPATION ASSESSMENT
Seating/Name Card:
To facilitate assigning grades for class participation, you are required to:
(1) Sign the attendance sheet in each class.
(2) Bring a large name card to each class and place it in front of you. Make sure that the name
card is legible from the front of the room. Names written either by hand or using colours are
often hard to read, so please print them in black! Students without name cards are welcome
to participate, but their participation will not be recorded. Please sit in the same seat for each
class.
(3) If a current photo of you is not on file, please go to the P.C. Lab and have a photograph
taken. These photographs will be made available to the instructor.

Missing Classes:
If you have a valid excuse for missing a class you will still obtain credit for attending provided:
1. If your absence was foreseen rather than unexpected, send an e-mail to the instructor in
advance explaining why you will be missing a class.
2. If your absence was unforeseen, send an e-mail to the instructor immediately after the
missed class. Note that you have missed a class and explain why.
Documentation of the reason for missing a class may be required for all but the first two excused
absences.
COMPUTERS AND OTHER ELECTRONIC DEVICES POLICY
Personal digital assistants (PDAs) and cell phones must be turned off during class. Computers
are to be used only for taking or viewing notes during lectures.

COMM 394: Economics and Business
Course Outline

- 4 -
SCHEDULE
Chapter references are to the textbook by James Brander.

Part I. Introduction and Context
Chapter 1 (Objectives and Overview)
Chapter 6, Section 6.4.1, pp. 125-127 (Rule of Law)
Readings
The Economist, Economics and the rule of law - Order in the jungle, March 13, 2008
http://www.economist.com/node/10849115.
Robert M. Solow, Hedging America, The New Republic, January 12, 2010
http://www.tnr.com/article/books-and-arts/hedging-america
Chapter 7 (The Canadian Business Environment): Reading assignment

Part II. Basic Issues in Government Policy Analysis
Chapter 2 (Four Useful Economic Concepts)

Readings
Krugman, Paul, Disaster relief economics, The New York Times, August 30, 2011.
http://krugman.blogs.nytimes.com/2011/08/30/disaster-relief-economics/


COMM 394: Economics and Business
Course Outline

- 5 -
Chapter 3 (The Normative Analysis of Government). Skip cost-benefit analysis.

Readings
Stephen J. Dubner and Steven D. Levitt, Unintended consequences, New York Times,
January 20, 2008 (http://www.nytimes.com/2008/01/20/magazine/20wwln-freak-
t.html)

Reminder: Each debate team must submit a complete priority listing of all
debate topics/sides in class on September 22.

Chapter 4 (Fairness, Ethics, and Public Policy)
Readings
Freeland, Chrystia, The dangerous rise of the millionaires, The Globe and Mail, June
21, 2013 (http://www.theglobeandmail.com/report-on-business/economy/the-
dangerous-rise-of-the-millionaires/article12734287/#dashboard/follows/)
Tamburri, Rosanna, We like to think wed never commit fraud, Globe and Mail, May 19,
2011 (http://www.theglobeandmail.com/report-on-business/managing/business-
education/we-like-to-think-wed-never-commit-fraud/article2028643/)
The Economist, Schumpeter: A tissue of lies, June 9, 2012, p. 75.
http://www.economist.com/node/21556548.
Fritzsche, David J., Phantom Expenses, Minicase MKTG-14, Arthur Anderson & Co,
SC, 1992
Fraedrich, John, Somethings Rotten in Hondo, Minicase MGMT-05, Arthur Anderson &
Co, SC, 1992

Chapter 3, Section 3.11 (cost-benefit analysis)
Readings
Shaw, William H. and Vincent Barry, Fords Pinto, Moral Issues in Business, 2nd ed.
(Wadsworth), 1991, pp. 86-88.
Saunders, Douglas, Whats your life worth? Lets get out a calculator, The Globe and
Mail, 2004
Summers, Lawrence, Let them eat pollution, The Economist, February 8, 1992.
Kingsbury, Kathleen, The value of a human life: $129,000", Time in partnership with
CNN, May 20, 2008 (http://www.time.com/time/health/article/0,8599,1808049,00.html)


COMM 394: Economics and Business
Course Outline

- 6 -
Chapter 5 (The Positive Theory of Government)
Reading
Ward, Doug, Does our system need lobbyists?, Vancouver Sun, May 12, 2007.
http://www2.canada.com/vancouversun/news/westcoastnews/story.html?id=e9380f5
6-5ca5-4e70-a304-6ed3a1a7b401


Chapter 15 (Corporate Social Responsibility)
Readings
Friedman, Milton, The social responsibility of business is to increase its profits, New
York Times, 1970
Arrow, Kenneth, Social responsibility and economic efficiency, Public Policy, Vol. XXI,
No. 3 (Summer), 1973
Gerlin, A., Coffee a hot topic after McDonalds case, The Wall Street Journal,
September 2, 1994
Smith, Greg, Op-ed: Why I Am Leaving Goldman Sachs, The New York Times, March
14, 2012. http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-
sachs.html?_r=1

Chapter 6 (Firms and Markets)

Part III. Policy Applications

Chapter 9 (Environmental Policy and Externalities)

Chapter 11 (Competition policy)

Part IV. Student Debates
Descriptions of the debates and rules for the debates are in a separate document
on the CONNECT website.

COMM 394: Economics and Business
Course Outline

- 7 -

WEEK # DATE TOPIC / ACTIVITY
WEEK 1 September 3
Chapter 1: Objectives and overview
Chapter 6.4.1: The Rule of Law
Chapter 7: The Canadian Business Environment: Reading assignment
WEEK 2
September 8
September 10
Chapter 2: Four useful economic concepts
Chapter 3: The normative analysis of government
WEEK 3
September 15
September 17
Chapter 3: The normative analysis of government
Chapter 4: Fairness, ethics, and public policy
WEEK 4
September 22


September 24
Chapter 4: Fairness, ethics, and public policy
Note: Each debate team must submit a complete priority listing of all
debate topics/sides in class on Sept. 22.
Chapter 4: Fairness, ethics, and public policy
WEEK 5
September 29
October 1
Chapter 5: The positive theory of government
Chapter 5: The positive theory of government
WEEK 6
October 6
October 7
October 8
Chapter 15: Corporate Social Responsibility
Midterm exam on Tuesday, 6:30-8:00pm, 80 minutes
Class cancelled due to midterm.
WEEK 7
October 13
October 15
University closed for Thanksgiving. No class.
Review midterm + Chapter 6: Firms and markets
WEEK 8
October 20
October 22
Chapter 6: Firms and markets
Chapter 9: Environment policy and externalities
WEEK 9
October 27
October 29
Chapter 9: Environment policy and externalities
Chapter 11: Competition policy
WEEK 10
November 3

November 5
Chapter 11: Competition policy. Summaries of arguments for Debate
1 distributed in class
Debate 1. Summaries of arguments for Debate 2 distributed in class
WEEK 11
November 10
November 12
Debate 2. Summaries of arguments for Debate 3 distributed in class
Debate 3. Summaries of arguments for Debate 4 distributed in class
WEEK 12
November 17
November 19
Debate 4. Summaries of arguments for Debate 5 distributed in class
Debate 5. Summaries of arguments for Debate 6 distributed in class
WEEK 13
November 24
November 26
Debate 6
Review session.


COMM 394: Economics and Business
Course Outline

- 8 -
COURSE AND INSTITUTIONAL POLICIES
The UBC Calendar serves as a record of many University academic policies and procedures. The
online Calendar is the official Calendar. Changes are incorporated online at intervals throughout
the year. Below are summaries of several key policies. For more detail, please refer to the web-
page indicated. If you still need more information, contact the Undergraduate Office.
Student Declaration and Responsibility
Upon registering, a student has initiated a contract with the University and is bound by the
following declaration:
"I hereby accept and submit myself to the statutes, rules and regulations, and ordinances
(including bylaws, codes, and policies) of The University of British Columbia, and of the faculty or
faculties in which I am registered, and to any amendments thereto which may be made while I am
a student of the University, and I promise to observe the same."
Read the entire policy.
Attendance
Regular attendance is expected of students in all their classes. Students who neglect their
academic work and assignments may be excluded from final examinations. Students who are
unavoidably absent because of illness or disability should report to their instructors on return to
classes. Any request for academic concession must be clearly expressed (see Academic
Concession). Read the entire policy.
Academic Integrity & Plagiarism
The Sauder School of Business places a very high value on academic honesty since the integrity
of academic work, by faculty and students alike, underpins the value of your degree. This is
analogous to the role of ethical behavior in the business world, where honesty and integrity
underpin the value of organizations and the people who run them. To this end, the University of
British Columbia has in place a set of policies dealing with academic integrity and related issues.
The University of British Columbias general policies on academic honesty and standards and
what constitutes plagiarism and academic misconduct can be found below:
Academic Honesty & Standards: http://www.calendar.ubc.ca/vancouver/index.cfm?tree=3,286,0,0
Academic Misconduct: http://www.calendar.ubc.ca/vancouver/index.cfm?tree=3,54,111,959
Academic Concession
Accommodations for missed exams will only be made in the case of illness, emergency or
compassionate reasons. Such excuses as prior personal travel plans and extra-curricular
commitments are not legitimate reasons. If you miss an exam due to illness, emergency, or
compassionate reasons, you must contact the Sauder Undergraduate Office (UGO) as soon as
possible and submit official supporting documentation.
University Policy on Academic Concession:
http://www.calendar.ubc.ca/vancouver/index.cfm?tree=3,48,0,0#255