Instructor: Dan Davis
10:00-10:50 AM Mon/Wed./Fri.
UNC-CH (Spring 2005)
Room: Gardner 308
Office Hours: 9:00-10:00 AM Mon./Wed.
E-Mail: davis12@email.unc.edu
Office Location: Hanes 300F
Final Exam: 2 May,2005, 8:00-11:00 AM, Gardner 308
Text: Industrial Organization: Theory and Practice, 2nd Edition, Don E. Waldman and Elizabeth J. Jensen, Pearson Education, Inc., (2001).
Course Objectives: Industrial Organization is a branch
of microeconomics focusing on the definitions of the firm, the industry,
and the markets in which they operate; the structure of an industry and
the markets in which it operates; the modeling of the conduct or behavior
of individual firms within that structure and market; the performance of
a structure and behavioral model in terms of allocation efficiency and
equity; and the impact of government antitrust and regulatory policy on
structure, behavior and performance. By the end of the course, you
should understand the interrelationships of the structure-conduct-performance
paradigm; understand alternative theories of industry structure and
firm behavior; understand the basics of game theory and its use in explaining
the strategic behavior of firms; be able to assess different business practices,
such as: product differentiation, advertising, price discrimination,
and vertical integration; and be able to assess the effects of antitrust
and regulatory policy.
Course Outline: The course will follow the outline of
the text and will focus on the application of industrial organizational
theory to the analysis of real economic problems. First we will review
the basics of industrial organization. Then we will examine game
theoretic models of firm strategic behavior in oligopolistic and monopolistic
competition structures. We then look at the business practices of
firms. Finally, we will look at the effect of governmental antitrust
and regulatory policy on firm behavior, and business practices.
Examinations and Grades: There will be optional homework
assignments throughout the semester. Economics is best learned by
analysing problems. While these will be ungraded, they will be invaluable
in developing intuition and problem-solving skills. There will be 2 mini-exams
worth 20% of your final course grade each. The final will be worth
60% of the course grade. The final will be comprehensive in nature.
There will be no makeup exams for the mini-exams. At the end of the
semester, I will compute your average four ways.
Method1: Midterm 1-20%
Midterm 2-20%
Final-60%
Method2: Midterm 1-34%
Final-66%
Method3:
Midterm 2-34%
Final-66%
Method4:
Final-100%
Whichever of the four averages is the highest determines the
final course grade. All students must take the final to receive
a course grade. Those students having a course average of 90-100
will receive an A. Those students with a course average of
80-89.99 will receive a B. Those students with a course average
of 70-79.99 will receive a grade of C. Those students
receiving a course of 60-69.99 will receive a D.
There will be no extra credit given in the course;however, each exam will
have bonus questions. The format for all exams will be multiple choice
using mark-sense scoring sheets that can be obtained before the exam at
the student bookstore. Exams will be closed-book and closed-notes
with the use of calculators and scratch paper allowed. There will
be no curve in determining final grades.
Honor Code: You are reminded that the University Honor
Code is in effect for all academic work. Do your work in accordance
with that honor code. Collaboration is allowed and encouraged
on homework, but collaboration on exams is forbidden.
General Comments: The course will move quickly; therefore,
it is imperative that you keep up with the reading and the lectures.
Anything in the reading or discussed in lecture is fair game for exam questions.
The material is cumulative so cramming will not work, nor will dumping
material after it has been tested on an exam. The final will test
knowledge of all material covered in the course.
Course Calendar:
Lecture Date
Topic
Reading Assignment
1
01/12
Intro/Math Tools
Ch. 1
2
01/14
Basic Theory
Ch. 2
3
01/19
Theory of the Firm I
Ch. 3
4
01/21
Theory of the Firm I
Ch. 3
5
01/24
Market Concentration I
Ch. 4
6
01/26
Market Concentration II
Ch. 4
7
01/28
Entry I
Ch. 5
8
01/31
Entry II
Ch. 5
9
02/02
Exit
Ch. 5
10
02/04
Exam I
Ch. 1-5
11
02/07
Game Theory I
Ch. 6
12
02/09
Game Theory II
Ch. 6
13
02/11
Oligopoly Theory I
Ch. 7
14
02/14
Oligopoly Theory II
Ch. 7
15
02/16
Oligopoly Theory III
Ch. 7
16
02/18
Collusion Theory I
Ch. 8
17
02/21
Collusion Theory II
Ch. 8
18
02/23
Collusion in Pratice I
Ch. 9
19
02/25
Collusion in Practice II
Ch. 9
20
02/28
Pricing Strategies I
Ch. 10
21
03/02
Pricing Strategies II
Ch. 10
22
03/04
Non-pricing Strategies I
Ch. 11
23
03/07
Non-pricing Strategies II
Ch. 11
24
03/09
Non-pricing Strategies III
Ch. 11
25
03/11
Exam II
Ch. 6-11
Spring Break 12-20 March
26
03/21
Product Differentiation
Ch. 12
27
03/23
Advertising
Ch. 12
28
03/28
Research and Development
Ch. 13
29
03/30
Price Discrimination I
Ch. 14
30
04/01
Price Discrimination II
Ch. 14
31
04/04
Vertical Integration I
Ch. 15
32
04/06
Vertical Integration II
Ch. 15
33
04/08
Market Power in Practice
Ch. 16
34
04/11
Computer Industry Case Study I Ch. 17
35
04/13
Computer Industry Case Study II Ch. 17
36
04/15
Antitrust Policy I
Ch. 18
37
04/18
Antitrust Policy II
Ch. 18
38
04/20
Antitrust Policy III
Ch. 19
39
04/22
Antitrust Policy IV
Ch. 19
40
04/25
Regulation I
Ch. 20
41
04/27
Regulation II
Ch. 20
42
04/29
Review/Course Critique
Ch. 1-20
43
05/02 Final Examination:
8:00-11:00 AM Ch. 1-20