ECO380: Managerial Economics I: Competitive Strategy

Transcription

1 ECO380: Managerial Economics I: Competitive Strategy Section L5101: Tuesday Room SS Instructor Prof. Carlos J. Serrano UT Office: Sidney Smith 5016A Office hours: Tuesday and Thursday 10:00am-11:00am carlos.serrano@utoronto.ca TA: TBA Description of the Course This course will address what determines the competitive advantage of a firm and assess existing tools of business strategy. The course will mainly take a practical and critical approach to assess business strategy. However, solid theoretical foundations of industrial organization will also be covered. The aim of the course is two fold. First, to build a toolkit of strategic concepts adaptable for different purposes in a variety of situations. Second, to enhance the critical thinking of the student and the potential development of new business strategies when existing ones are not useful. Prerequisites: - ECO200Y5 or ECO206Y5 - ECO220Y5 or ECO227Y5 or (STA250H1 and STA257H5) or (STA257H5 and STA261H5) Exclusions: - ECO310Y5 Grading: There will be two term tests (closed book and notes). Each represents 25% of the final grade. Moreover, there will be one final (50%), which is cumulative. The date of the final exam is TBA. Requests for regrades will need to be in writing within one week of the exam being returned. To ensure consistency, I will regrade the entire test, not just a single question. I will hand out four problem sets (see website); however these will not be collected or graded. All of the exams must be taken on their scheduled times. If you believe you are too ill to complete any term work you must see a doctor IMMEDIATELY and have the doctor completely fill out an official University of Toronto Student Medical Certificate ( Other medical notes will NOT be accepted. On the certificate you must also legibly write a telephone number where you can be reached and your address. The claim of illness, however, is NOT sufficient grounds in itself to ensure that you will be excused. To have any chance of being excused, the University of Toronto Student Medical Certificate must clearly indicate that in the doctor's opinion, which is based on an examination of you on or

2 immediately before the date of the term work, you are too sick to complete it. Note that the physician's report must establish that you were examined and diagnosed at the time of illness, not after the fact. I will NOT accept a statement that merely confirms a report of illness made by you for documentation by the physician. The completed University of Toronto Student Medical Certificate must be given to me within one week of the missed term work: this is a form deadline. It is your responsibility to find out whether or not you have been excused. Do NOT assume you are excused because you have dropped off a certificate. If, and ONLY if, you are excused from the midterm, then you must bring then the other midterm will account as 50% of your final grade. If are you excused from two midterms, then your final exam will count 100% of your final grade. Students who miss the final exam must petition the Faculty of Arts and Science for permission to write a deferred examination. Students are responsible to know both the material of the problem sets, the assigned readings and the one covered during lectures. Collaboration on problem sets is strongly encouraged. Scholastic dishonesty: According to the Faculty of Arts and Sciences policy, any act of scholastic dishonesty entails a 0 for the particular assignment and exam or the course. See the Faculty of Arts and Sciences policies for further details on scholastic dishonesty and related matters. Textbooks: The main textbooks for this course are: - McAfee (2002), Competitive Solutions - Branderburger and Nalebuff (1998), Co-Opetition Other books you check at the library are: - Carlton and Perloff, Modern Industrial Organization Important Dates: -September, 19: Problem set 1 in webpage -October 3: Problem set 2 in webpage -October, 17: Term Test 1 -November, 7: Problem set 3 in webpage -November, 21: Term Test 2 -November, 28: Problem set 4 in webpage -TBA: Final exam Topics: 1. Introduction and Industry Analysis BN, ch. 1 and 2 McAfee, ch. 1 and 2

3 2. Competitive Advantage BN, ch. 5 McAfee, ch. 3 and 4 Porter, M.E., What is Strategy?, Harvard Business Review, Nov-Dec 1996 CP, ch The Product Life Cycle McAfee, ch. 5 Klepper, Steven (1996). Entry, Exit, Growth and Innovation over the Product Life Cycle. American Economic Review 86, No. 3. (June 1996), pp Price Discrimination BN, Bundling p Complexity p McAfee, ch 11 CP, ch. 9 and 10 Varian, Hall. Chapter on Price Discrimination. Intermediate Microeconomics: A Modern Approach. 5. Vertical Integration BN, p McAfee, Holdup problem, p CP, ch. 12 Klein, Crawford and Alchian (1978), Vertical Integration, Appropriable Rents, and the Competitive Contracting Process, Journal of Law and Economics, vol. 21, pp Grossman, Sanford J. and Oliver D. Hart, The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration The Journal of Political Economy, Vol. 94, No. 4. (Aug., 1986), pp Entry BN, p and p McAfee. Entry barriers p Deterring entry p Aghion, P. and P. Bolton, Contracts as a Barrier to Entry, American Economic Review (1987), Cooperation and Theory of Cartels McAfee, ch. 6 Varian, Hall. Chapter on Non-cooperative Game theory, Cournot, Bertrand, etc. Intermediate Microeconomics: A Modern Approach. 8. Organizational Theory: Economies of Scope and a Primer on Incentives McAfee, Organizational scope ch. 7. Holmstrom and Roberts (1998), The Boundaries of the Firm Revisited, Journal of Economic Perspectives, vol 12, no. 4, pp

4 9. Franchising Caves and Murphy (1976). Franchising: Firms, Markets, and Intangible Assets. Southern Economic Journal, Vol. 42, No. 4 (Apr. 1976), pp Mathewson and Winter (1985). The Economics of Franchising. Journal of Law and Economics, Vol. 28, No. 3. (Oct 1985), pp Gallini and Lutz (1992). Dual Distribution and Royalty Fees in Franchising. Journal of Law, Economics & Organization, Vol. 8, No. 3. (Oct, 1992), pp Economics of Density and Logistics Ishii, J. (2005). Compatibility, Competition, and Investment in Network Industries: ATM Networks in the Banking Industry. Stanford GSB Working paper. Grzelonska, P. (2006), The Location of Branches: Evidence from U.S. Banks, Working Paper, University of Minnesota. Holmes, T. (2006), Walmart and the Economics of Density, Working Paper, University of Minnesota. 11. Patent value, Litigation and Technological Change CP, ch. 16 Griliches (1990), Patent Statistics as Indicators: Survey, Journal of Economic Literature, vol. 28, No. 4, pp Bessen and Meurer (2005). The Patent Litigation Explosion. Working paper Boston University School of Law. Boldrin, M. and Levine. D. (2003). Perfectly Competitive Innovation. Working paper, University of Minnesota. Hall, B. and Ziedonis, R.(2001) The patent paradox revisited: an empirical study of patenting in the US semiconductor industry, , Rand Journal of Economics, vol. 32, pp Hall, B., Jaffe, A., and Tratjenberg M. (2004). Market Value and Patents Citations. Rand Journal of Economics. Lanjouw and Schankerman (1997). Stylized Facts of Patent Litigation: Value, Scope and Ownership. NBER Working paper Pakes, A. and Schankerman (1986). Estimates of the Value of Patent Rights in European Countries During the Post-1950 Period. The Economic Journal, Vol. 96: No. 384, pp Pakes, A. (1986). Patents as Options: Some Estimates of the Value of Holding European Patent Stocks. Econometrica, Vol. 54, No. 4. Putnam, J. (1986). The Value of International Patent Protection (PhD Thesis, Yale University) Serrano, C. (2006). The Market for Intellectual Property: Evidence from the Transfer of Patents, Working Paper, University of Toronto. 12. Management and Markets of Technology Gans and Stern (2003). The Product Market and the Market for Ideas: Commercialization Strategies for Technology Entrepreneurs. Research Policy 32, Kortum, S. and Lerner, J. (2000), Assessing the Contribution of Venture Capital to Innovation, RAND Journal of Economics, vol. 31 (4), pp Gallini, N. and B. Wright, Technology Transfer Under Asymmetric Information, 21 RAND Journal of Economics, Spring 1990,

5 Gallini N. and Winter, R. (1985). Licensing in the Theory of Innovation. RAND, vol. 16, No. 2. (Summer 1985), pp Serrano, C., The Market for Intellectual Property: Evidence from the Transfer of Patents, Working Paper, University of Toronto. Hopenhayn, H., Figueroa, N. and Serrano, C. (2006). The Ownership of Intellectual Property Assets: The Role of Asymmetry of information and Sequential Innovation.