| ses # | TOPICS | Lecture notes | handouts |
|---|---|---|---|
| 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, Role of Internet | Course Overview Markets (PDF) | Extra Sources (PDF) Questions for U.K. Credit Card Case Discussion (PDF) |
| L2 | Defining the Market Discussion of Market Definition and Market Strategy Case Study: Credit Cards in the U.K. | Market Definition (PDF) | Table: Profitability of Consumer Groups - Stuart, Harborne W., Jr. "Pricing for Profit: The U.K. Credit Card Industry in the Late 1980s (A)." Boston, MA: Harvard Business School, 1997. Case No. 9-897-168. |
| 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 | Analysis of Competitive Markets (PDF) | Thurow, Roger and Geoff Winestock. A Global Journal Report --- Bittersweet: How an Addiction To Sugar Subsidies Hurts Development --Politically Vital Farm Support, Especially in EU, Throttles Exports From Poor Nations --- Negating $50 Billion in Aid." The Wall Street Journal, 16 September 2002. |
| 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 | Production and Cost I (PDF) | |
| 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 | Production and Cost II (PDF) | |
| L6 | Consumer Demand Introduction to Consumer Demand: Empirical Demand Analysis and Models of Consumer Choice | Consumer Demand Introduction (PDF) | |
| 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 | Consumer Demand and Product Characteristics (PDF) | |
| L8 | Time and Uncertainty Intertemporal Prices and Net Present Value Uncertainty and Risk Aversion Waiting and Option Value | Time and Uncertainty (PDF) | |
| L9 | Market Power Competition and Entry Monopoly Power and Mark-up Pricing Production across Multiple Plants Pricing with Network Externalities | Market Power (PDF) | |
| L10 | Pricing with Market Power Various Forms of Price Discrimination Segmented Markets and Pricing Oriented toward Market Segmentation Examples of Price Discrimination in Practice | Pricing with Market Power I (PDF) | Maremont, Mark. "The Only Difference is When You Throw Them Away." Business Week, 12 July 1993. |
| L11 | Pricing with Market Power (cont.) The Use of Two-part Tariffs Volume Pricing Commodity Bundling | Pricing with Market Power II | Game Theory Cournot Questions (PDF) Tran, Khanh T.L. "Fans of Web Games Pay to Play." The Wall Street Journal, 9 November 2000. |
| 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 | Game Theory and Competitive Strategy I (PDF) | |
| 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 | Game Theory and Competitive Strategy II (PDF) | Barnett, F. William. "Making Game Theory Work in Practice." The Wall Street Journal, 13 February 1995. Myerson, Allen R. "Philip Morris Cuts Cigarette Prices, Stunning Market -- Stocks Plunge as Result -- 40 cent-a-pack Reduction in No. 1 Marlboro Brand is Directed at Its Lower-Cost Rivals." The New York Times, 3 April 1993. Ortega, Bob. "Retail Combat -- Warehouse-Club War Leaves Few Standing, And They Are Bruised -- Wal-Mart and Price-Costco Survive Bitter U.S. Clash, Will Resume it in Mexico -- An Intense Game of Chicken." The Wall Street Journal, 18 November 1993. |
| L14 | Collusion and Competition in Oligopolistic Markets Tacit Collusion Examples: Electrical Equipment, Mineral Cartels | Collusion and Competition in Oligopolistic Markets (PDF) | |
| L15 | Limiting Market Power Antitrust Laws U.S. vs. Microsoft® Common Property Resources | Limiting Market Power (PDF) | Antitrust and Monopolies (PDF) Surowiecki, James. "Mixed Motives." The Financial Page, The New Yorker, 8 November 2004. |
| L16 | Auctions and Bidding Alternative Forms of Auctions and their Characteristics The Winner's Curse | Auctions and Bidding (PDF) | Double Marginalization (PDF) |
| 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 | Transfer Pricing and Vertical Integration (PDF) | Outsourcing Sales (PDF) Phillips, Michael M. "Taking Shelter -- As Congress Ponders New Tax Breaks, Firms Already Find Plenty -- Using Tactics Such as Shifting Profit to Havens Abroad, Some Pare Bills to Zero -- GM Keeps the Tab Down." The Wall Street Journal, 9 August 1999. |
| 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 | Incentives and Employment (PDF) | |
| L19 | Information and Market Structure Markets with Asymmetric Information Quality Uncertainty and the Market for "Lemons" Adverse Selection Signaling | Asymmetric Information and Market Structure (PDF) | |
| L20 | Externalities and Market Structure Positive and Negative Externalities Market Failure and Forms of Government Intervention Property Rights | Externalities and Market Structure (PDF) | Other Economics Courses (PDF) |
| L21 | Final Examination |