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JOHN CABOT UNIVERSITY

COURSE CODE: "EC 307"
COURSE NAME: "Industrial Organization"
SEMESTER & YEAR: Spring 2015
SYLLABUS

INSTRUCTOR: Francesco Ruscitti
EMAIL: [email protected]
HOURS: MW 3:00 PM 4:15 PM
TOTAL NO. OF CONTACT HOURS: 45
CREDITS:
PREREQUISITES: Prerequisites: EC 201, MA 198; Recommended: EC 301
OFFICE HOURS: Before class (after class as well, whenever possible) and by appointment. To make an appointment, just approach me in class or send me an email ahead of time.

COURSE DESCRIPTION:

Industrial organization (IO) is concerned with firms and industries, firm conducts, and economic performance of industries. The approach employed will be theoretical and analytical. The first part of this course can be thought of as a continuation of Principles of Microeconomics, as we will study important topics we did not have time to analyze in EC 201. Special emphasis will be put on firms' strategic behavior with price and non-price competition. IO combines Microeconomics and Game Theory. However, EC 307 will be an introductory course, therefore I will strive to keep the material as simple as possible. Nevertheless, the approach will be rigorous and analytical.  Industrial Organization has changed a great deal in the past two decades. It has evolved from a niche area in Economics to a discipline (very rich both theoretically and empirically) that is studied not only in itself, but also as an important conceptual support for other fields like finance, marketing and strategy.

This course focuses on the analysis of markets and industries from a microeconomic perspective. It provides a fairly in-depth analysis of the characteristics of the firm, the many ways in which firms interact within markets, and the policy instruments that are available to ensure that welfare is maximized.
REMARK: please note that this syllabus is somewhat preliminary. Later on, before the semester starts, I will post on MyJCU (and attach to a message on MyJCU) the definitive version of the syllabus which will be much more detailed than this and will spell out accurately all of my policies. Also, the exams dates will be specified in the definitive draft of the syllabus.
A note on the prerequisites for this course: MA 198 (Calculus) is a prerequisite along with Principles of Microeconomics. Knowledge of basic Calculus will be assumed. Please keep in mind that EC 307 is a theory course. Hence,  feeling comfortable with the analysis of graphs and abstract reasoning is recommendable, very useful and nearly indispensable.

SUMMARY OF COURSE CONTENT:
Industrial organization is the study of industries structure and firm behavior. Using the basic tools of microeconomic theory and game theory, this course explores the economic dynamics in an industry or across industries by examining the nature of strategic interaction among firms. The central issues concern firms' strategic choices of price and quantity in markets where the assumption of perfect competition does not hold.  Tentative topics to be covered include: firm and costs; monopoly and regulation; perfect competition, oligopolistic competition, collusion, market structure and market power, price and non price strategies, entry costs, market structure and welfare; monopolistic competition and product differentiation.
LEARNING OUTCOMES:

First and foremost, development of analytical skills, ability to reason in a rigorous manner, and ability to cross-over from Micro to Game Theory and from Micro to Algebra and Calculus.

 

1. To understand how price and non-price competition among firms affect economic outcome and welfare.

2. To analyze and evaluate models of competitive, oligopolistic, and monopoly markets.

3. To analyze how regulation and economic policy can in principle improve upon the market outcome.

 

The knowledge that students will acquire through this course is useful for further study of firms and markets as well as the effects of regulatory and legal systems (such as antitrust law or competitive policies) on firms strategies. The topics covered are useful not only for an academic career, but also to work in private enterprises, including financial and legal institutions; in federal and state regulatory agencies, and in the field of international trade. Nowadays, several international consulting companies seek prospective employers with a basic knowledge of Industrial Organization.
TEXTBOOK:
Book TitleAuthorPublisherISBN numberLibrary Call NumberCommentsFormatLocal BookstoreOnline Purchase
Industrial Organization. Theory and Practice (International edition, fourth edition)D. E. Waldman, and E. J. JensenPearsonISBN-10: 0133083772. ISBN-13: 9780133083774     
REQUIRED RESERVED READING:
NONE

RECOMMENDED RESERVED READING:
NONE
GRADING POLICY
-ASSESSMENT METHODS:
AssignmentGuidelinesWeight
Midterm exam 1The exam will be worth 100 points. It will cover all the material taught up until the class before the exam day. The questions will be open-ended questions and numerical problems (I might give also multiple-choice questions). Regardless of the format, the nature of the questions will be analytical. 18%
Midterm exam 2The exam will be worth 100 points. It will cover all the material taught from midterm exam 1 onward. The questions will be open-ended questions and numerical problems (I might give also multiple-choice questions). Regardless of the format, the nature of the questions will be analytical. 34%
Final examThe exam will be worth 100 points. It will be cumulative, that is it will be about all the material covered throughout the course. The questions will be open-ended questions and numerical problems (I might give also multiple-choice questions). Regardless of the format, the nature of the questions will be analytical.48%

-ASSESSMENT CRITERIA:
AWork of this quality directly addresses the question or problem raised and provides a coherent argument displaying an extensive knowledge of relevant information or content. This type of work demonstrates the ability to critically evaluate concepts and theory and has an element of novelty and originality. There is clear evidence of a significant amount of reading beyond that required for the course. 93-100: A. 90-92.99:A-
BThis is highly competent level of performance and directly addresses the question or problem raised.There is a demonstration of some ability to critically evaluatetheory and concepts and relate them to practice. Discussions reflect the student’s own arguments and are not simply a repetition of standard lecture andreference material. The work does not suffer from any major errors or omissions and provides evidence of reading beyond the required assignments. 86-89.99: B+ 83-85.99: B 80-82.99: B-
CThis is an acceptable level of performance and provides answers that are clear but limited, reflecting the information offered in the lectures and reference readings. 75-79.99: C+ 70-74.99: C 65-69.99: C-
DThis level of performances demonstrates that the student lacks a coherent grasp of the material.Important information is omitted and irrelevant points included.In effect, the student has barely done enough to persuade the instructor that s/he should not fail. 60-64.99: D+ 55-59.99: D. 50-54.99: D-
FThis work fails to show any knowledge or understanding of the issues raised in the question. Most of the material in the answer is irrelevant. Below 50: F

-ATTENDANCE REQUIREMENTS:
Industrial Organization is a theory course that can be fairly challenging. Hence, attendance is STRONGLY ENCOURAGED and very beneficial. POLICY ON ABSENCES: Later on I will circulate the definitive version of the syllabus with the exact exams dates. In general, there will be no make-up for missed exams. If, for any compelling reason, you happen to miss a midterm exam, I want you to notify me ahead of time (if possible), and I would ask you to provide me with a formal and valid justification for the absence. If I deem the justification is legitimate and deserves attention, then I would let you take a make-up exam. Note: Specific policies for the final exam are put in place by the School and I shall comply with them.
ACADEMIC HONESTY
As stated in the university catalog, any student who commits an act of academic dishonesty will receive a failing grade on the work in which the dishonesty occurred. In addition, acts of academic dishonesty, irrespective of the weight of the assignment, may result in the student receiving a failing grade in the course. Instances of academic dishonesty will be reported to the Dean of Academic Affairs. A student who is reported twice for academic dishonesty is subject to summary dismissal from the University. In such a case, the Academic Council will then make a recommendation to the President, who will make the final decision.
STUDENTS WITH LEARNING OR OTHER DISABILITIES
John Cabot University does not discriminate on the basis of disability or handicap. Students with approved accommodations must inform their professors at the beginning of the term. Please see the website for the complete policy.

SCHEDULE

Weeks

Topics

Reading Assignment

Exam Dates and topics covered

Week 1

 

The firm and its costs (selected topics)

CHAPTER 2

 

Weeks 2 and 3

 

Competition and Monopoly (selected topics)

 

CHAPTER 3

 

Week 4

 

Monopoly practices (selected topics)

CHAPTER 5

 

Weeks 5 and 6

 

Game Theory: A Framework for Understanding Oligopolistic Behavior

(selected topics)

 

CHAPTER 7

 Midterm 1 date: TBA

Weeks 7, 8, and 9

 

The development of (oligopoly) theory (selected topics)

 

 

CHAPTER 8

 

Week 10

Collusion: the great prisoner’s dilemma (selected topics)

 

CHAPTER 9

 

Weeks 11 and 12

Monopolistic competition, product differentiation and advertising (selected topics)

 

CHAPTERS 13 and 14

 Midterm 2 date: TBA

Week 13

Price discrimination (selected topics)

 

CHAPTER 16

 

Week 14

Review

 

 

 

 

 

 Final exam (comprehensive, that is cumulative): see the university schedule for date and time