ECON30180 Industrial Economics: Economics of Business Strategy

Academic Year 2020/2021

This module focuses on strategic decision making by firms. It is divided into two parts. In the first part we examine the outcomes, in prices and quantities, that different market structures produce. We consider perfect competition, monopoly, monopolistic competition and finally oligopoly. The second part looks at more advanced strategic decisions such as strategic pricing to deter entry, entry deterrence by means other than prices, collusion, price discrimination, product differentiation, investment in research and development, advertising. Each of these topics is analyzed using game theoretical frameworks. The approach is more analytical than descriptive.

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Curricular information is subject to change

Learning Outcomes:

On successful completion of this module students should have:
1. An understanding of pricing and quantity setting in different competitive environments.
2. An understanding of strategic actions of firms regarding entry deterrence, collusion, price discrimination, product proliferation.
3. An understanding of the possible need for market intervention and regulation by government.

Indicative Module Content:

I Introduction
-Perfect Competition
-Monopoly

II Oligopoly Theory
-Quantity Determination Models
The Cournot-Nash Model (with 2 and n firms)
The Stackelberg Model
-Price Determination Models
The Bertrand Model
The Dominant Firm price leadership Model
-Limited Capacity and Price Competition Model

III Collusion

IV Entry and Pricing Strategy to Deter Entry: Limit Pricing

V Entry and Non-Pricing Strategy to Deter Entry
-Excess Capacity
-Raising the Rival’s Cost
-Learning by Doing
-Product Proliferation

VI Business Practises.
-Product Differentiation
-Price Discrimination
-R&D
-Vertical Integration

Student Effort Hours: 
Student Effort Type Hours
Autonomous Student Learning

100

Online Learning

20

Total

120

Approaches to Teaching and Learning:
The module delivery mode is asynchronous online lectures. Recorded lectures will be posted at the start of each week and students are expected to access and study the online material during the week.

Problem sets will be assigned regularly to facilitate self-assessment and group work. Solutions to problem sets will be provided and in some cases will be explained in detail in posted videos. 
Requirements, Exclusions and Recommendations
Learning Requirements:

ECON 20010 Intermediate Microeconomics

Learning Recommendations:

A course in quantitative techniques


Module Requisites and Incompatibles
Not applicable to this module.
 
Assessment Strategy  
Description Timing Open Book Exam Component Scale Must Pass Component % of Final Grade
Class Test: Online midterm examination to be held during the week 27-30 October. Week 6 n/a Standard conversion grade scale 40% No

30

Examination: Final exam 2 hour End of Trimester Exam No Standard conversion grade scale 40% No

70


Carry forward of passed components
No
 
Resit In Terminal Exam
Spring No
Please see Student Jargon Buster for more information about remediation types and timing. 
Feedback Strategy/Strategies

• Group/class feedback, post-assessment
• Self-assessment activities

How will my Feedback be Delivered?

1. Regular problem sets will be assigned throughout the semester for self-assessment; solutions will be posted on Brightspace. 2. Solutions to midterm examination will be posted on Brightspace within 20 working days from the date of the midterm, and those students who wish to go over their midterm will be given a virtual appointment for individual feedback.

Recommended readings:
- Don. E. Waldman, Elizabeth J. Jensen, Industrial Organization, Theory and Practice, Pearson
- Dennis Carlton, Jeffrey Perloff, Modern Industrial Organization, Pearson
- John Lipczynski, John Wilson, John Goddard, Industrial Organization: Competition, strategy and policies. Pearson
- Jeffrey Church, Roger Ware, Industrial Organization: A strategic Approach. McGraw-Hill (FREE ON BRIGHTSPACE)
- Paul Belleflamme, Martin Peitz, Industrial Organization, Markets and Strategies. Cambridge University Press