Industrial Economics: Competition, Strategy and Policy B
Module Code: ECU33072
Module Title: Industrial Economics: Competition, Strategy and Policy B
- ECTS Weighting: 5
- Semester/Term Taught: Semester 2
- Contact Hours: 22 academic hours (i.e. 50 minutes) of lectures and 4-5 academic hours of tutorials
- Module Personnel: Lecturer - Mr Stefano Ceolotto (firstname.lastname@example.org)
*Please note that this outline has not been finalised and is subject to change
Markets with a small number of interdependent sellers provide the setting for Industrial Economics: Competition, Strategy and Policy. A key emphasis in the module is on drawing on the insights of theory to examine analytically the strategic actions of firms and the response required, if any, of public
policy. The analysis, when linked to welfare economics, provides the basis for competition policy and the appropriate regulation of markets. The following topics are likely to be covered in the module: collusion, cartels, predation, price discrimination, tying/bundling, vertical relations. A brief review of some of the fundamental concepts covered in ECU33071 Industrial Economics A will be done. Students are also strongly advised to review their SF notes on microeconomics and perhaps even their JF notes on mathematics as familiarity with this material is assumed.
Tutorials will address problem sets related to the material covered during the lectures. 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.
Module Learning Aims
This module aims to:
- Extend students analysis of microeconomics to an examination of market structure and the theory of the firm
- Provide students with insights into the behaviour of dominant firms and certain forms of firm conduct such as predatory pricing, innovation, product differentiation and advertising
- Provide students with a greater understanding of everyday headlines on these topics and the tools for determining when firm conduct might warrant government intervention
- Enable students to critically evaluate the conduct of dominant firms and effectively communicate their arguments using economic principles
- Use economic principles, tools and examples of relevant cases to form, support and communicate arguments and opinions
On successful completion of this module, students will be able to:
- Identify what is meant by a dominant firm and analyse how dominant firms use different business strategies to achieve and maintain dominance;
- Use economic reasoning to critically evaluate the competition effects of a range of business strategies, like collusion, strategic pricing, advertising and innovation;
- Understand how firms can be vertically related with one another and the forms that this relation can take, including vertical coordination, vertical contracts, vertical restraints, vertical integration;
- Explain the goals of competition policy and the techniques used by competition authorities to assess deviations from legitimate competitive behaviour;
- Use economic principles, tools and examples of relevant cases to form, support and communicate arguments and opinions.
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:
Martin, S., Industrial Organisation in Context, Oxford University Press, 2010;
Lipczynski, J., J.O.S. Wilson and J.Goddard , Industrial Organization: Competition, Strategy and Policy, Pearson Education Ltd., 4th edition, 2013; or
Carlton, D and J. Perloff, Modern Industrial Organization, Pearson: Addison-Wesley, 4th/Global edition, 2015.
In addition, the following book contains interesting competition policy case studies:
J. Kwoka & L. 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). Note that completion of ECU33071 Industrial Economics: Competition, Strategy and Policy A is not required to enrol in this module.
An assignment 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). Further details on the assignment to follow. The final exam will account for the remaining 70% of your overall grade.