ECON 4697-001: Industrial Organization
Spring 2009
Professor
Yongmin Chen
Office:
Econ 112
Tel. (303)
492-8736
Class Time:
12:30-1:45 PM on Tu/Th
Classroom:
ECON 119
Office
Hours: 2:00-3:00 PM on Tu/Th; additional office
hours with appointment.
Website: http://spot.colorado.edu/~cheny/
Industrial
organization studies the functioning of markets. It is concerned with business
behavior and strategy, as well as their implications for economic efficiency.
It also studies the role of public policies in promoting efficiency. The topics that we intend to cover are listed
below in the course schedule. The
textbook is Industrial Organization:
Contemporary Theory and Practice by Pepall, Richards, and Norman,
4th edition. I will indicate the required
readings below and in my lectures.
Prerequisites
& Grading:
Students must have successfully completed ECON 3070, Intermediate
Microeconomics, before taking this course. Students are also
expected to know basic calculus. Grades are based on homework and class participation
(10%), two midterm exams (50%), and a final exam (40%). You are encouraged to form study groups to
discuss homework and lecture materials.
The
course materials are arranged by topics (the topics are listed below), and each
topic is usually covered over several classes.
When homework is assigned for a topic, it is usually due at the
beginning of the first class for the next topic. You can start working on problems in an
assignment before I have finished the topic.
A
tentative course schedule is attached (the chapter and page numbers refer to
those in the textbook). There can be
changes to this schedule during the semester, which will be announced in
classes. It is your responsibility to
update your information about the course according to announcements made in
classes.
Course Schedule:
1.
Introduction
2.
Basic Microeconomic Tools
3.
Market Structure and Market Power
4.
Monopoly Pricing
--Price
for a single product
--Prices
for multiple products
--Group-pricing
--Nonlinear
pricing
--Dynamic
pricing
--Bundling
and Tie-in sales
Midterm
Exam 1
5.
Game Theory and Oligopoly Markets: Basic Concepts and Solutions
--What
is a game?
--Strategy
--Dominant
Strategy
--Nash
equilibrium
--Cournot
Model
6.
Price Competition
--The
Bertrand Duopoly Model
--Asymmetric
Duopoly or multiple firms
--Product
Differentiation in a duopoly: the Hotelling model
--Product
Differentiation with Many firms: the Circle model and the Spokes model
7.
Dynamic Games and Competition
--Entry
games and Subgame perfect Nash equilibrium
--The
Stackelberg Model
--Sequential
price competition
--Oligopoly
price discrimination by purchase history
8.
Price-Fixing, Repeated Games, and Collusion
--Price
Fixing
--Repeated
Bertrand Duopoly
--The
number of firms and collusion
--Other
factors facilitating or hindering collusion
Midterm
Exam 2
9.
Horizontal Mergers
--Merger
analysis in the Cournot model
--Merger
and Cost savings
--The
merged firms as Stackelberg leaders
--Horizontal
merger and price competition
--Public
policy toward horizontal mergers
10.
Vertical Mergers
--The
foreclosure theory
--Efficiency
arguments
--Post-Chicago
Approach
--Public
policy toward vertical mergers
11.
Vertical Price Restraints
--Bilateral
Monopoly
--Competitive
downstream
--Resale
price maintenance: theory and public policy
--Upstream
competition
12.
Nonprice Vertical Restraints
--Upstream
competition and exclusive dealing
--Exclusive
territories
Final
Exam
*Students with disabilities who may need academic
accommodations should discuss options with me during the first two weeks of
class.
*The