Industrial Economics: Competition, Strategy and Policy A
Module Code: ECU33071
Module Title: Industrial Economics: Competition, Strategy and Policy A
- ECTS Weighting: 5
- Semester/Term Taught: Semester 1
- Contact Hours: 22 academic hours (i.e. 50 minutes) of lectures and 4-5 academic hours of tutorials
- Module Personnel: Lecturer - Professor Francis O’Toole
Module Learning Aims
The module provides students with an overview of how firms interact with one another as competitors and possibly as customers and suppliers, together with the implications for consumer welfare and societal welfare. As such, students will be provided with an understanding of the rationale for competition and regulatory policy, together with the tools for determining when firm conduct and/or expected market outcomes warrant government intervention/involvement.
On successful completion of this module students will be able to:
- analyse interactions between firms using game theory concepts
- measure how consumer welfare and societal welfare change in response to different behaviours of firms in the market
- identify how cooperation between firms can help and how it can harm final consumers
- use economic tools and examples of relevant cases to form and support arguments and opinions
Markets with a small number of interdependent sellers provide the setting for Industrial Economics: Competition, Strategy and Policy. This module stresses the importance of the role of game theory in the analysis of such markets and provides a forum for students to move beyond a two-dimensional (price and quantity) evaluation of market performance. At least some of the following topics are likely to be covered in the module: welfare economics, consumer surplus and societal welfare: competition: monopoly: contestability: barriers to entry; oligopoly and non-co-operative game theory: (Cournot, Bertrand and Stackelberg); horizontal agreements/mergers; product differentiation and monopolistic competition; and, vertical agreements.
Case studies and market analyses are used throughout the module. Students are required to complete problem sets. Students are strongly advised to review their SF notes on microeconomics and perhaps their JF notes on mathematics as familiarity with material from these modules is assumed.
Recommended Reading List
There is no core module textbook. However, students should have fairly regular access to one of the following textbooks or their equivalents:
Dennis Carlton and Jeffrey Perloff, Modern Industrial Organization, Pearson, 4th/Global edition, 2015; or,
Stephen Martin, Industrial Organisation in Context, Oxford University Press, 2010.
In addition, the following book (and earlier editions of same) contains interesting competition policy case studies:
John Kwoka & Lawrence White (eds.), The Antitrust Revolution: Economics, Competition and Policy, Seventh Edition, Oxford University Press, 2018.
Module Pre Requisite
ECU22011 Intermediate Economics A: Microeconomics (or its equivalent).
An assignment based on an interesting real-world market (e.g. a recent merger or abuse of dominance allegation) will account for 30% of your overall grade. The penalty for late submission/no show for the assignment is 100 per cent; there will of course be no penalty imposed on late submission provided that there is an appropriate medical certificate (or equivalent). However, all assignments must be completed by the end of the teaching term (i.e. Friday 3rd December 2021). The final exam will account for the remaining 70% of your overall grade..