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  • March 2008
  • Course Overview Note

Dynamic Markets

By: Joshua D. Coval and Erik Stafford
  • Format:Print
  • | Pages:19
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Abstract

The Dynamic Markets course at Harvard Business School is organized around the hands-on application of financial decision making in a wide variety of capital market settings. The course relies heavily on in-class simulations of a range of market settings where students compete with their classmates for profits. The main pedagogical approach used in the course is what we call deriving by doing. The essential aspects of this pedagogy are dynamic decision settings, a strong reliance on competitive markets, and derivation of core concepts through active student decision-making. The upTick financial simulation software, developed at the Harvard Business School, is used to realistically recreate classic decision-settings in a competitive classroom setting. We convey the timing and uncertainty inherent in real-world finance problems by presenting the "case facts" sequentially (i.e., as they become available to the real-world decision maker), thereby allowing students to modify or reverse decisions as new information become available, and to respond strategically to the decisions of their competitors. Additionally, we clear student decisions in realistic capital markets, such that equilibrium outcomes are determined by competitive student interaction. Even though students participate in markets corresponding to a particular setting, the prices determined in the simulations are set by the participants and can depart from the historical prices within bounds set by the instructor.

Keywords

Value Creation; Decision Making; Capital Markets; Competitive Strategy; Profit; Software; Information; Strategy; Price; Outcome or Result; Curriculum and Courses; Theory

Citation

Coval, Joshua D., and Erik Stafford. "Dynamic Markets." Harvard Business School Course Overview Note 208-143, March 2008.​

About The Authors

Joshua D. Coval

Finance
→More Publications

Erik Stafford

Finance
→More Publications

More from the Authors

    • March 2021
    • Faculty Research

    Carnival Corp: Cruising In the Time of Covid

    By: Emily R. McComb and Erik Stafford
    • 2019
    • Faculty Research

    Do Banks Have an Edge?

    By: Juliane Begenau and Erik Stafford
    • December 2017
    • Journal of Political Economy

    Reply: Do Powerful Politicians Really Cause Corporate Downsizing?

    By: Lauren Cohen, Joshua D. Coval and Christopher J. Malloy
More from the Authors
  • Carnival Corp: Cruising In the Time of Covid By: Emily R. McComb and Erik Stafford
  • Do Banks Have an Edge? By: Juliane Begenau and Erik Stafford
  • Reply: Do Powerful Politicians Really Cause Corporate Downsizing? By: Lauren Cohen, Joshua D. Coval and Christopher J. Malloy
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