TIME AND LOCATION: 7:40 -10:25 P.M., Mon/Wed.; Room: #311, AM building.
ADMINISTRATIVE
INFO: Office: 636 CBA; Phone: 404-651-2775; Fax: 404-651-4985;
E-mail: secobas@aol.com. Office hours: By appointment; also after class.
CATALOG DESCRIPTION: An application of microeconomic theory and industrial organization to topics important for internal firm organization and strategic business decision-making. Topics vary, but typically include transactions cost analysis and empirical implications; multi-product cost concepts; vertical integration; product differentiation and product quality; durable good pricing; innovation and patents; spatial competition; delivered (base point) pricing; price discrimination; product bundling; network economies and information industry implications; and special topics in regulatory economics and transitional adjustments in deregulated industries.
PREREQUISITES: Econ 8100; CSP: 1; Course material is in part an extension of topics that have been covered in Econ 8440 (Industrial Organization and Antitrust Economics), but primarily covers topics that do not overlap those of 8440. This course is fully self-contained and focused especially upon topics that are useful to business as well as academic economists. Attempts are made to accommodate the unique interests and backgrounds of students in various academic programs and specializations.
COURSE REQUIREMENTS: A mid-term exam and a final exam (both are take-home exams). Class participation is important and serves as a "tie-breaker" if exams result in a borderline grade. Ideally, each student would be asked to lead the discussion on one topic during semester, but this depends on the size of the class.
TEXTS: Dennis W. Carlton and Jeffrey M. Perloff, Modern Industrial Organization, Third Edition, Harper Collins, 2000.
Scott E. Masten, editor, Case Studies in Contracting and Organization, Oxford University Press, 1996.
Supplemental reading will be assigned. IF an article is not easily available in major journals, it will be either provided at no cost to students, or made available via WebCt for downloading. All distribution is in compliance with the applicable copyright law.
ATTENDANCE POLICIES: Attendance and active participation are important. Make efforts to obtain material from any classes that must be missed. Advance arrangements must also be made if adjustments are requested for exam deadlines. Also, please remember that university and government financial policy requires that students be withdrawn from any class that they fail to attend regularly. Therefore, if you have legitimate reasons for missing some classes (due to health or related reasons), it is important to let me know.
COURSE SCHEDULE:
Chapters from Carlton and Perloff, Modern Industrial Organization, are labeled
CP; those from Masten are labeled M. Unless specifically assigned, the appendices
are optional. Note that the withdrawal date (with a "W") is July 12.
| DATE | TOPIC AND ASSIGNMENTS |
| 6/17: | Course
organization; Introduction to economic theories of the firm; review of traditional
economic reasons for vertical integration and vertical restrictions
CP: Chs.
1 |
| 6/19: | Discussion
of background readings on economic theories of the firm; Neoclassical vs.
transaction cost models; clarification of rents, quasi-rents and the hold-up
problem
M: Ch. 1,
Introduction |
| 6/24: | Franchising
and rent-seeking; McDonald's
CP: Ch.
12 (pp. 410-end) |
| 6/26: | Modern
developments; classic cases in vertical integration.
Bengt Holmstrom
and John Roberts, "The Boundaries of the Firm Revisited," Journal
of Economic Perspectives, 12(4), Fall 1998. |
| 7/1: | Principal-Agent
extensions and implications; "internal" labor market hypotheses
and evidence
David E.M.
Sappington, "Incentives in Principal-Agent Relationships," |
| 7/3: | Optimal
contacting as an alternative to vertical integration; examples from "traditional industries;" examples from "creative industries;" Distribute take-home MIDTERM EXAM (due July 8) M: Ch. 2,
The Whaling Industry |
| 7/8: | Midterm
exam due at the beginning of class; expansion of cost analysis to multi-product
settings; modern developments
Ch. 7: "Cost
Concepts for Decision-Making" from Evan Douglas, Managerial Economics |
| 7/10: | Return
and discuss Midterm Exam; continue discussion of cost-analysis Application
of cost concepts to the economics of regulation/de-regulation
CP: Ch. 20
|
| 7/15: | Decision-making
with product durability; Lease-Buy applications and cases CP: Ch. 15 M: Ch. 12, United States vs. United Shoe case |
| 7/17: | Strategic
implications of limited information; Advertising debates
CP: Ch. 13 |
| 7/22: | The
role of patents and the determination of "optimal" policy; Market structure and technological change; optimal incentive structures for innovation CP: Ch. 16 |
| 7/24: | Innovation
and technological change cases: the debate about the effects of computerization
on productivity
William P.
Rogerson, "Economic Incentives and the Defense Procurement |
| 7/29: | Product
differentiation and the issue of optimal product quality; location strategy
and the "revival" of monopolistic competition models
CP: Ch. 7
|
| 7/31: | Advanced
topics in market clearing: theory and evidence (Distribute Final Exam -
due August 9)
CP: Ch.
17 |
| 8/5: | "Raising
rivals costs" and "delivered pricing:" what have we learned?
CP, "Raising
Rivals Costs" section in Ch. 11, pp. 353-361. |
| Take-Home Final Due: Friday, August 9 at 5:00 P.M. | |