Thanks to feedback from users around the world, Managerial Economics and Business Strategy remains the best-selling managerial text in the market. We are grateful to all of you for allowing us to provide this updated and improved edition. Before highlighting some of the new features of the eighth edition, we would like to stress that the fundamental goal of the book—providing students with the tools from intermediate microeconomics, game theory, and industrial organization that they need to make sound managerial decisions—has not changed. What has changed is the examples used to make managerial economics come to life for this generation of students and—thanks to the addition of Jeff Prince to this edition— the utilization of new technologies (such as Connect) for enhancing the teaching and learning experiences of instructors and their students.

This book begins by teaching managers the practical utility of basic economic tools such as present value analysis, supply and demand, regression, indifference curves, isoquants, production, costs, and the basic models of perfect competition, monopoly, and monopolistic competition. Adopters and reviewers also praise the book for its real-world examples and because it includes modern topics not contained in any other single managerial economics textbook: oligopoly, penetration pricing, multistage and repeated games, foreclosure, contracting, vertical and horizontal integration, networks, bargaining, predatory pricing, principal–agent problems, raising rivals' costs, adverse selection, auctions, screening and signaling, search, limit pricing, and a host of other pricing strategies for firms enjoying market power. This balanced coverage of traditional and modern microeconomic tools makes it appropriate for a wide variety of managerial economics classrooms. An increasing number of business schools are adopting this book to replace (or use alongside) managerial strategy texts laden with anecdotes but lacking the microeconomic tools needed to identify and implement the business strategies that are optimal in a given situation.

This eighth edition of Managerial Economics and Business Strategy has been revised to include updated examples and problems, but it retains all of the basic content that made previous editions a success. The basic structure of the textbook is unchanged to insure a smooth transition to this edition.

CHANGES IN THE EIGHTH EDITION

We have made every effort to update and improve Managerial Economics and Business Strategy while assuring a smooth transition to the eighth edition. Following is a summary of the pedagogical improvements, enhanced supplements, and content changes that make the eighth edition an even more powerful tool for teaching and learning managerial economics and business strategy.

• McGraw-Hill's homework management platform system, Connect^®, is now offered for the eighth edition. This allows students to access video tutorials for selected demonstration problems through an electronic version of the book available in Connect^®Plus, and gives instructors the ability to assign (and automatically grade) literally hundreds of end-of-chapter problems (including algorithmic variants), and options to provide students with immediate, detailed feedback and answers. In our experience, this allows both students and instructors to economize on the time required to set up one-on-one appointments.

• Also new to the eighth edition, LearnSmart is an adaptive learning tool that allows students to continually test their mastery of basic and more complex concepts.

• Over 100 new variations of the class-tested problems from the previous edition plus several new end-of-chapter problems. Where appropriate, problems from the previous edition have been updated to reflect the current economic climate.

• Suggested end-of-chapter problems for each learning objective, to help foster targeted learning.

• The updated Test Bank has been rigorously quality tested, and now contains over 100 new, challenging problems.

• New and updated Headlines.

• New and updated Inside Business applications.

CHAPTER-BY-CHAPTER CHANGES

Chapter1 contains new and updated examples, and an updated Inside Business application. It also contains twenty refreshed end-of-chapter problems.

Chapter2 contains new and updated examples and Inside Business applications. This chapter has fourteen refreshed end-of-chapter problems.

Chapter3 contains new and updated examples as well as an updated Inside Business application. It also has improved discussion of regression analysis. This chapter has twenty refreshed end-of-chapter problems.

Chapter4 contains updated examples, and two new Inside Business applications; the first examines the relationship between the budget constraint and credit card usage, and the second examines output-oriented incentives. It also has two new and sixteen refreshed end-of-chapter problems.

Chapter5 contains updated Inside Business applications, as well as a new demonstration problem. It also has sixteen refreshed end-of-chapter problems.

Chapter6 offers a new Headline, and new examples. It also has four new and three refreshed end-of-chapter problems.

Chapter7 contains thoroughly updated examples and industry data, as well as updated Inside Business applications. It also includes updates that account for the new 2010 Horizontal Merger Guidelines, and nine refreshed end-of-chapter problems.

Chapter8 contains an updated Headline and several new examples. It also has fifteen refreshed end-of-chapter problems.

Chapter9 provides improved exposition of contestable markets, and a new Inside Business application examining OPEC and the temptation to cheat on collusive arrangements. It also includes thirteen refreshed end-of-chapter problems.

Chapter10 contains a new Inside Business application examining cola wars in India, as well as improved exposition of equilibrium strategies. It also has sixteen refreshed end-of-chapter problems.

Chapter11 contains an updated Headline, updated Inside Business applications, and a new Inside Business application examining whether price discrimination is necessarily bad for consumers. There are fifteen refreshed end-of-chapter problems.

Chapter12 includes an improved explanation of the merits of standard deviation as a measure of risk, and a new Inside Business application that examines adverse selection in the context of a famous quote by Groucho Marx. It also has eleven refreshed end-of-chapter problems.

Chapter13 contains a new Headline and new examples for commitment mechanisms and network effects. It also has eight refreshed end-of-chapter problems.

Chapter14 contains updated discussion of the 2010 Horizontal Merger Guidelines, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and updated Inside Business applications. It also has seven refreshed end-of-chapter problems.