Prof. Ping LIN, WYL225, Tel.: Office Hours: Tue: 14:30-16:30 Thur: 14:30-16:30 or by appointment

Transcription

1 ECO4316 Industrial Economics and Competition Policy First Semester, 2018/2019 Lecture: KKL206, Tues: 16:30-18:20 Lingnan University Tutorials; Wed: 11:30am Prof. Ping LIN, WYL225, Tel.: Office Hours: Tue: 14:30-16:30 Thur: 14:30-16:30 or by appointment SYLLABUS Objectives This course provides the students with (1) a good how economists analyze competitive strategies of business firms; and (2) the basic knowledge about the public policies ( policy and regulatory policies) that developed countries adopt in order to promote, innovation and economic efficiency, as well as to safeguard consumer interests. Prerequisite(s): a) ECO2101 Introduction to Economics, or (b) BUS2105 Microeconomics for Business and BUS2108 Global Business Environment Key Reference:Dennis W. Carlton and Jeffery M. Perloff, Modern Industrial Organization, 4rd edition, N.Y.: HarperCollinsPublisher, 2004 Textbook s web site: Lecture notes will be provided in Moodle/lectures Learning Outcomes: Upon complection of this course, students are expected to be able to - Understand the best concepts, methodology, and theories in economics; - Use undertand competitive innovation, and industry dynamics in real-life situations; - Understand the main the roles of policy; and - Participate in meaningful discussions about the public policies toward and consumer welfare. Assessment Continuous Assessment 50% Mid-term test/quizzes/assignments 30% Group project + comments 20% Final Examination 50% Total 100% Course Schedule: Week 1. Introduction Ch. 1 Structure-Conduct-Performance The Chicago School Firms and Cost Ch. 2 Economies of Scale Economies of Scope 1

2 Week 1-2 Basic Theory Competition Ch. 3 Barriers to entry Contestability Monopoly and Market power Ch.4 Deadweight loss of Monopoly Rent Seeking The Benefits of Monopoly Natural Monopoly Theory of Dominant Firms Ch. 4 Week 2 Cartel Agreements Ch. 5 Factors Facilitating Cartel Formation Enforcing a Cartel Agreement Prisoners Dilemma Case Studies Week 3 Noncooperative Oligopoly Ch. 6 Game Theory Cournot Quantity Setting Stackelberg Quantity Leadership Week 4 Product Differentiation Ch. 7 Product Differentiation and Market Power Case Study: The Jeans Market Week 5 Price Discrimination Ch Third-Degree Price Discrimination Non-Linear Pricing Tie-In Sales Examples: Coupons Does Competition Always Lower Prices? Midterm Test: Tuesday, 16 Oct Week 7 Mergers/Antitrust Laws and Regulation Ch Social costs and benefits of mergers The Williamson proposal Public policy toward mergers Case study: Week 8-9 Vertical Integration and Vertical Relationships Ch. 12 Motivations for Vertical Integration Problem of Double Marginalization Possible Anti-Competitive Effects of Vertical Relationships Franchising Case Studies: On-line vertical restraints (travelling booking, e.g.) 2

3 Week 9-10 Information, Advertising, and Disclosure Ch The market for Lemons Information and Product Quality Social Benefits and Costs of Advertising Advertising as a Barrier to Entry Examples: Understanding Consumer Information Welfare Effects of Restricting Alcohol Advertising Week 11 Patent and Technological Change Ch. 16 IPR (Patent, Trademarkets, and Copyrights) Relationship Among Market Structure, Firm Size, and R&D The Economics of Patent System Case Studies: Mickey Mouse Legislation Week Economics of Competition in New-Technology Economy Network Effects/Economics Two-sided markets Pricing Strategy of Dominant Firms Examples: Platform Social Media Supplementary Readings: Group Projects Working on a group basis, you will choose to write a research paper (about 15 pages long) on a topic in the field of economics. Provide your own analysis using the methodology, approaches and techniques developed in this course. Your group will present your research output in tutorial sessions. Also, you are required to provide individual comments on one of the other projects at the time of their presentation. Your paper is due on the last week of term, and must be in English. Sample topics: 1. Recent cartel cases (bid rigging) in Hong Kong 2. Pricing strategies of dominant firms/platforms (e.g., Amazon/Taoboo) 3. The recent Google case in the EU (on comparison shopping or Android licensing) 4. Intellectural property right protection: Online piratcy, music streaming 5. Merger and acquisitons 6. Big data and policy 7. Your own choice 3

4 Examination/ Midterm/Auizzes/Assi gnment/group Project Learning Outcome Understand the basic concepts, theories of modern economics Ability to undertand competitive industry dynamics. Undertand the roles of public policy in the market place Participate in meaningful discussion of policy 4 Assessment Rubrics ExcellentA-, A Good B- to B+ Acceptable C- to C+ Poor D or below a thorough the basic concepts, methodology, and theories. Always able to use undertand observed firm competitive industry dynamics. Always able to undertand the roles of public policy in the market place Always able to evaluate in a sensible way the impacts of business behavior and to articulate for the need for a good the basic concepts, theories. Usually able to use undertand competitive industry dynamics.. a good the rationales for and roles of public policy in the market place evaluate the impacts of business behavior and to articulate for the need for a basic understanding of basic concepts, theories,. Sometimes able to use economics to undertand observed firm competitive innovation, and industry dynamics.le. a basic the roles of public policy in the market place participate in some discussionof the impacts of business behavior and to articulate for the need for WARNING With regard to your coursework in particular, you are reminded: You must note the sources of quotations, data and general information in the essay. These sources/references should appear in alphabetical order in your list of references/bibliography. According to Lingnan University and Social Sciences Programme policy, plagiarism is "presentation of another person's work without proper acknowledgment of the Unable to littile the basic concepts, theories Fail to use undertand any competitive industry dynamics. Fail to show any understand of the roles of Unable to participate in any meaningful discussion of business behavior and

5 source". Plagiarism (unattributed copying) will be heavily penalised and may attract a zero mark and disciplinary action. Important Notes: (1) Students are expected to spend a total of 6 hours (i.e. 3 hours of class contact and 3 hours of personal study) per week to achieve the course learning outcomes. (2) Students shall be aware of the University regulations about dishonest practice in course work, tests and examinations, and the possible consequences as stipulated in the Regulations Governing University Examinations. In particular, plagiarism, being a kind of dishonest practice, is the presentation of another person s work without proper acknowledgement of the source, including exact phrases, or summarised ideas, or even footnotes/citations, whether protected by copyright or not, as the student s own work. Students are required to strictly follow university regulations governing academic integrity and honesty. (3) Students are required to submit writing assignment(s) using Turnitin. To enhance students plagiarism, a mini-course Online Tutorial on Plagiarism Awareness is available on 5