Application of economic principles to decision making in business firms or other management units. The basic concepts are drawn from microeconomic theory, but new tools of analysis have been added. Statistical methods, for example, are increasingly important in estimating current and future demand for products. The methods of operations research and programming provide scientific criteria for maximizing profit, minimizing cost, and selecting the most profitable combination of products. Decision-making theory and game theory, which recognize the conditions of uncertainty and imperfect knowledge under which business managers operate, have contributed to systematic methods of assessing investment opportunities.
Learn more about managerial economics with a free trial on Britannica.com.
Managerial Discretion and Corporate Governance in Publicly Traded Firms: Evidence from the Property-Liability Insurance Industry
Sep 01, 2011; ABSTRACT We study the incremental impact of corporate governance in mitigating managerial discretion, controlling for...