| ses # | TOPICS | KEY DATES |
|---|---|---|
| L1 | Markets Introduction to the Course Types of Markets: Competitive, Monopoly/Monopsony and Oligopoly/Oligopsony The Boundaries of a Market Product Boundaries, Geographical Boundaries Examples: Bicycles, Prescription Drugs, Airline Travel, and Role of Internet | |
| R1 | Review of Own- and Cross-price Elasticities, Market Definition, Consumer and Producer Surplus Use of Supply and Demand Curves Review of Logarithms | |
| L2 | Defining the Market Discussion of Market Definition and Market Strategy Case Study: Credit Cards in the U.K. | |
| L3 | Analysis of Competitive Markets Supply-Demand Analysis of Government Intervention in Competitive Markets (Examples: Taxes, Subsidies, Tariffs, Import Quotas) Detailed Analysis of the Sugar Quota and its Effects | |
| R2 | Further Review of Supply and Demand | |
| L4 | Production and Cost Brief Review of Production Economics and Cost Minimization Cost Concepts: Fixed, Variable and Sunk Total, Average, and Marginal Cost in the Short Run and Long Run Accounting Cost vs. Economic Cost | Homework set 1 due |
| L5 | Production and Cost (cont.) Airline Cost Example: User Cost of Capital Economies of Scale and Scope The Learning Curve and Cost Reduction over Time | |
| R3 | Review of the Economics of Production and Cost | |
| L6 | Consumer Demand Introduction to Consumer Demand: Empirical Demand Analysis and Models of Consumer Choice | |
| L7 | Consumer Demand (cont.) Pricing, Product Characteristics and Quality The Analysis of Network Externalities, and their Competitive and Strategic Implications Example from the Software Industry | Homework set 2 due |
| R4 | Review of the Economics of Demand | |
| L8 | Time and Uncertainty Intertemporal Prices and Net Present Value Uncertainty and Risk Aversion Waiting and Option Value | |
| L9 | Market Power Competition and Entry Monopoly Power and Mark-up Pricing Production across Multiple Plants Pricing with Network Externalities | |
| R5 | Review of Market Power (Monopoly) | Homework set 3 due |
| Review for Midterm Exam | ||
| Midterm Exam | ||
| L10 | Pricing with Market Power Various Forms of Price Discrimination Segmented Markets and Pricing Oriented toward Market Segmentation Examples of Price Discrimination in Practice | |
| L11 | Pricing with Market Power (cont.) The Use of Two-part Tariffs Volume Pricing Commodity Bundling | |
| R6 | Review of Pricing with Market Power | |
| L12 | Game Theory and Competitive Strategy Thinking Strategically Duopoly Exercise (in class) to Introduce Cournot First-mover Advantage: Stackelberg Repeated Cournot Cournot-Nash in detail Nash Equilibrium in Other Kinds of Games | |
| L13 | Game Theory and Competitive Strategy (cont.) Dominant Strategies Nash Equilibrium again Repeated Games The Prisoners' Dilemma Sequential Games Threats and Credibility Pre-emptive Moves Entry Deterrence | Homework set 4 due |
| R7 | Review of Game Theory | |
| L14 | Collusion and Competition in Oligopolistic Markets Tacit Collusion Examples: Electrical Equipment, Mineral Cartels | |
| R8 | Review of Game Theory, Collusion and Cartels | |
| L15 | Limiting Market Power Antitrust Laws U.S. vs. Microsoft® Common Property Resources | Homework set 5 due |
| L16 | Auctions and Bidding Alternative Forms of Auctions and their Characteristics The Winner's Curse | |
| R9 | Review of Auctions and Common Property Resources | |
| L17 | Transfer Pricing and Vertical Integration Transfer Pricing in the Vertically Integrated Firm Transfer Pricing with Outside Markets Double Marginalization Costs and Benefits of Vertical Integration | |
| L18 | Incentives and Information Principal-agent Problem and Incentives Moral Hazard Multi-tasking Promotion Tournaments and Up-or-out Policies Team Incentives Back-loaded Wages | |
| L19 | Information and Market Structure Markets with Asymmetric Information Quality Uncertainty and the Market for "Lemons" Adverse Selection Signaling | |
| R10 | Review of Transfer Pricing and Asymmetric Information | Homework set 6 due |
| L20 | Externalities and Market Structure Positive and Negative Externalities Market Failure and Forms of Government Intervention Property Rights | |
| Review for Final Exam | ||
| L21 | Final Examination |