Industrial Organization ECON 373 - A1 Fall 2019
Instructor: David Brown, Tory 9-24, [email protected].
Office Hours: Tues 12:30 PM - 2:30 PM or by appointment.
Course Time: Tues & Thur 3:30 PM - 4:50 PM Course Location: T 1 93
Course Description:
This course is a survey of the behavior and performance of firms in different market structures.
We will study theoretical models of the modern firm, pricing decisions, product differentiation and advertising, technological advance. This course will rely on theoretical models and empirical evidence that is traditional for this field.
Required Textbook: Luis Cabral, Introduction to Industrial Organization, Second Edition, MIT Press.
Note: I will cover concepts that are not in the textbook. The textbook should be viewed as a complement to the lectures, not a substitute. You are responsible for the material covered both in the textbook and the in-class lectures. Therefore, class attendance is very important to do well in this course. If you have difficulty understanding the material, please come see me in my office hours or schedule an appointment.
Additional Resources*:
(1) Church and Ware, “Industrial Organization: A Strategic Approach”, McGraw-Hill (2000) (2) Pepall, Richards, and Norman, “Industrial Organization: Contemporary Theory and Empirical Applications,” Wiley-Blackwell, 4th Edition (2008)
*Note: These books are not required for this course. They may be useful references for supplemen- tary material.
Prerequisites:
ECON 281 or equivalent. Registration in the class will be canceled if you have not taken (and passed) the prerequisites. The course will be taught under the assumption that you are familiar with the basic microeconomic theories of the firm, consumer choice, and competitive market equilibrium. If you are not familiar with the basic economic analysis that should have been covered in ECON 281, or if you did not do very well in ECON 281, you should consider reviewing chapters 2-5 of the text.
Course Website:
Course information including the course outline, assignments, handouts, and grades will be posted on the eClass Moodle system. If you have questions about how to use the website, contact the IT resources, please do not contact me.
Grade Policy: Your course grade will be based on two midterms and a cumulative Final Exam.
The midterms are worth 30% each. The cumulative Final Exam is worth 40%. The questions on the exams will be short answer questions and will involve applying the basic tools of economic analysis discussed in class. The exams may require the manipulation of diagrams and formal model
derivations. The explanation in words of the economic intuition underlying an answer will be an important part of the exams. There will be no multiple choice questions on the exams.
Exam/Assignments Percentage Due Dates
Midterm Exam 1 30% October 1 (In-Class)
Midterm Exam 2 30% November 5 (In-Class)
Final Exam 40% TBD
Note: The due dates on the problem sets and midterm exam are subject to change.
There is no pre-set distribution of grades for this course. The grade distribution will generally fit the target distribution for a 300-level course, but the distribution of individual classes may vary.
Both absolute performance and relative performance to the rest of the class will be considered in assigning letter grades.
Attendance:
While there is no explicit attendance policy, I strongly urge you to attend every class meeting as there will be questions on the Exams from the lectures. I will follow the organization of the book.
However, there will be material covered in the class lectures that is not directly detailed in the book. You are responsible for all material covered in class, and all the chapters we cover from the text.
Policies:
Policy about course outlines can be found in 23.4(2) of the University Calendar. (GFC 29 SEP 2003)
• Late Assignments and Missed Midterms: There will be no make-up midterm exam or extra credit essays. If you are not able to take your midterm exam because of a legitimate reason, the weight of the midterm exam will be transferred to the final exam. If you miss the exam because of a medical reason, please submit the Medical Declaration Form to the Faculty. If you will miss the final exam, you may apply to your Faculty for a deferred exam.
Note that a deferred final exam will not be approved if a student, excluding the final exam, has completed less than half of the assigned work (Calendar, 23.5.6(2)).
• Academic Integrity: The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Stu- dents are particularly urged to familiarize themselves with the provisions of the Code of Student Behaviour (online at www.ualberta.ca/secretariat/appeals.htm) and avoid any be- haviour which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University. (GFC 29 SEP 2003). Policy about the course outlines can be found in 23.4(2) of the University Calendar. (GFC 29 SEP 2003).
• Learning Environment: The Faculty of Arts is committed to ensuring that all students, faculty and staff are able to work and study in an environment that is safe and free from discrimination and harassment. It does not tolerate behaviour that undermines that environ- ment. The department urges anyone who feels that this policy is being violated to (1) discuss the matter with the person whose behaviour is causing concern; or (2) if that discussion is un- satisfactory, or there is concern that direct discussion is inappropriate or threatening, discuss it with the Chair of the Department. For additional advice or assistance regarding this policy you may contact the student ombudservice: http://www.ombudservice.ualberta.ca/. Information about the University of Alberta Discrimination and Harassment Policy and Procedures can be found in the GFC Policy Manual, section 44 available at http://gfcpolicymanual.ualberta.ca/.
• Student Accessibility Services: If you have a condition that may require some classroom or exam modifications, please contact SAS (www.ssds.ualberta.ca) to obtain a determination as to what accommodations should be made.
• Student Success Centre: The Student Success Centre (www.studentsuccess.ualberta.ca) offers a variety of learning resources, including a variety of workshops in learning effective study and exam strategies. Sessions are available in person and online, for a modest fee.
• Centre for Writers: The Centre for Writers (www.c4w.ualberta.ca) offers free one-on-one writing coaching to all students. Students can request consultation for a writing project at any stage of development, including completed and graded work.
• Calculators: You may need a simple calculator for the exams. Programmable calculators will not be allowed.
Course Outline:
Topics and readings may be added or deleted as the term progresses.
Chapter 1. . . What is Industrial Organization?
Chapter 2 . . . Consumers Chapter 3 . . . Firms Chapter 4 . . . Competition, Equilibrium, and Efficiency Chapter 5 . . . .Market Failure and Public Policy Midterm 1 . . . October 1 Chapter 6 . . . Price Discrimination Chapter 7 . . . Games and Strategies Chapter 8 . . . Oligopoly Chapter 9 . . . Collusion and Price Wars Chapter 10 . . . Market Structure Midterm 2 . . . November 5 Chapter 12 . . . Market Foreclosure Chapter 14 . . . Product Differentiation Chapter 15 . . . Innovation Chapter 16 . . . Networks Final . . . TBD
