Exploring Strategic Finance through Alternative Perspectives
Added on 2024-04-29
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Journal Entry
22nd Jan Session 1
Today, the professor introduced the concept of approaching strategic finance with
an "alternative eye," which literally translates from the Irish text "súl eile." Initially,
we'll be examining topics from a traditional perspective, but the key will be to then
revisit these concepts with a critical lens, questioning assumptions and exploring
alternative viewpoints. This two perspective approach feels like a powerful way to
gain a deeper understanding of the subject matter.
The introductory slides offered a foundation in core economic principles. However,
the thought-provoking statement, 'Economics is too important to leave to the
experts,' suggests these issues are multifaceted and require diverse perspectives for
a complete understanding.
Today's lecture explored capital structure and introduced Modigliani-Miller Theory.
The lecture today explored Friedman's billiard player analogy.Friedman suggests
that, like an expert billiard player, humans might achieve success without
consciously employing perfect calculations.This raises a critical question: Do
economic models need to better account for "bounded rationality"? Bounded
rationality acknowledges that real-world factors like emotions, limited information,
and cognitive biases influence decision-making.
Feb 12th Session 3
Today in class, we discussed Nash equilibrium, a concept that speaks some serious
strategy into game theory.
Imagine a game where everyone makes a choice, but the outcome hinges on what
everyone else picks. Nash equilibrium is like , considering everyone else's moves,
no one has an incentive to change their own. It's the "no regrets" zone – everyone's
playing their best hand based on the expected actions of others.
22nd Jan Session 1
Today, the professor introduced the concept of approaching strategic finance with
an "alternative eye," which literally translates from the Irish text "súl eile." Initially,
we'll be examining topics from a traditional perspective, but the key will be to then
revisit these concepts with a critical lens, questioning assumptions and exploring
alternative viewpoints. This two perspective approach feels like a powerful way to
gain a deeper understanding of the subject matter.
The introductory slides offered a foundation in core economic principles. However,
the thought-provoking statement, 'Economics is too important to leave to the
experts,' suggests these issues are multifaceted and require diverse perspectives for
a complete understanding.
Today's lecture explored capital structure and introduced Modigliani-Miller Theory.
The lecture today explored Friedman's billiard player analogy.Friedman suggests
that, like an expert billiard player, humans might achieve success without
consciously employing perfect calculations.This raises a critical question: Do
economic models need to better account for "bounded rationality"? Bounded
rationality acknowledges that real-world factors like emotions, limited information,
and cognitive biases influence decision-making.
Feb 12th Session 3
Today in class, we discussed Nash equilibrium, a concept that speaks some serious
strategy into game theory.
Imagine a game where everyone makes a choice, but the outcome hinges on what
everyone else picks. Nash equilibrium is like , considering everyone else's moves,
no one has an incentive to change their own. It's the "no regrets" zone – everyone's
playing their best hand based on the expected actions of others.
Intrigued by "A Beautiful Mind" (2001) mentioning Adam Smith in relation to game
theory. Want to see how the movie connects the "invisible hand" to strategic
decision-making.
Prisoner's Dilemma! It's a scenario where the "rational" choice for each player
actually leads to a worse outcome for everyone. This paradox of selfishness is makes
it so intriguing. Interesting to see game theory challenges our assumptions about
strategic decisions.
I learnt something new - Real option games analyze investments with flexibility.
Companies weigh "acting now" vs. waiting to see how competitors and market
conditions change, allowing them to adapt their strategy for the best outcome.
19th feb Session 4
"Product Markets, Competition and Corporate Finance," paper
discussed in class. These were the key aspects that intrigued me. Revealing the
intricate dance between a company's financial choices and the competitive landscape
it operates in. Financing decisions like debt vs. equity can be strategic weapons,
impacting not just the company itself but also its rivals. This deep connection
between corporate finance and product markets highlights the importance of
considering both sides of the coin for strategic decision-making.
We then looked at the airline industry which also is one of my papers for the group
presentation therefore it gave me insights into my group presentation.
Airline competition revolves around city pairs, not necessarily nationwide routes.
This makes sense, as travellers typically look for the best option between specific
origin and destination cities.
The concept of corporate bankruptcy being immaterial to firm value is mind-
blowing. Does it mean bankruptcy isn't always a sign of financial trouble?
theory. Want to see how the movie connects the "invisible hand" to strategic
decision-making.
Prisoner's Dilemma! It's a scenario where the "rational" choice for each player
actually leads to a worse outcome for everyone. This paradox of selfishness is makes
it so intriguing. Interesting to see game theory challenges our assumptions about
strategic decisions.
I learnt something new - Real option games analyze investments with flexibility.
Companies weigh "acting now" vs. waiting to see how competitors and market
conditions change, allowing them to adapt their strategy for the best outcome.
19th feb Session 4
"Product Markets, Competition and Corporate Finance," paper
discussed in class. These were the key aspects that intrigued me. Revealing the
intricate dance between a company's financial choices and the competitive landscape
it operates in. Financing decisions like debt vs. equity can be strategic weapons,
impacting not just the company itself but also its rivals. This deep connection
between corporate finance and product markets highlights the importance of
considering both sides of the coin for strategic decision-making.
We then looked at the airline industry which also is one of my papers for the group
presentation therefore it gave me insights into my group presentation.
Airline competition revolves around city pairs, not necessarily nationwide routes.
This makes sense, as travellers typically look for the best option between specific
origin and destination cities.
The concept of corporate bankruptcy being immaterial to firm value is mind-
blowing. Does it mean bankruptcy isn't always a sign of financial trouble?
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