In addition to the regular readings, there are current events readings added over the course of the term. This year's current events readings are listed below the table.
The readings in the table below are from the textbook: Pindyck, Robert S., and Daniel L. Rubinfeld. Microeconomics. 5th ed. Upper Saddle River, NJ: Prentice-Hall, 27 July 2000. ISBN: 0130165832.
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
|Pindyck and Rubinfeld: Chapters 1 and 2 |
Lecture Notes on Markets and Market Definition
|L2||Defining the Market |
Discussion of Market Definition and Market Strategy
Case Study: Credit Cards in the U.K.
|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
|Pindyck and Rubinfeld: Chapter 9 |
"The United States Sugar Program."
|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
|Pindyck and Rubinfeld: Sections 6.1-6.4, 7.1-7.5 |
Lecture Notes on Cost Concepts
|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
Pindyck and Rubinfeld: Section 7.6
|L6||Consumer Demand |
Introduction to Consumer Demand: Empirical Demand Analysis and Models of Consumer Choice
|Pindyck and Rubinfeld: Sections 7.7, 3.1-3.3, 4.6|
|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
|Pindyck and Rubinfeld: Sections 4.1-4.5|
|L8||Time and Uncertainty |
Intertemporal Prices and Net Present Value
Uncertainty and Risk Aversion
Waiting and Option Value
|Pindyck and Rubinfeld: Sections 15.1-15.4, 15.7, 5.1-5.2|
|L9||Market Power |
Competition and Entry
Monopoly Power and Mark-up pricing
Production across Multiple Plants
Pricing with Network Externalities
|Pindyck and Rubinfeld: Chapter 8, 10.1-10.3|
|L10||Pricing with Market Power |
Various Forms of Price Discrimination
Segmented Markets and Pricing Oriented toward Market Segmentation
Examples of Price Discrimination in Practice
|Pindyck and Rubinfeld: Sections 11.1-11.3|
|L11||Pricing with Market Power (cont.) |
The Use of Two-part Tariffs
|Pindyck and Rubinfeld: Sections 11.4-11.5|
|L12||Game Theory and Competitive Strategy |
Duopoly Exercise (in class) to Introduce Cournot
First-mover Advantage: Stackelberg
Cournot-Nash in detail
Nash Equilibrium in Other Kinds of Games
|Pindyck and Rubinfeld: Sections 12.2-12.3|
|L13||Game Theory and Competitive Strategy (cont.) |
Nash Equilibrium again
The Prisoners' Dilemma
Threats and Credibility
Pindyck and Rubinfeld: Chapter 12.4-12.5, 13.1-13.6
|L14||Collusion and Competition in Oligopolistic Markets |
Examples: Electrical Equipment, Mineral Cartels
|Porter, Michael. "General Electric vs. Westinghouse in Large Turbine Generators (A)." Boston, MA: Harvard Business School, 1980. Case No. 9-380-128. |
Pindyck and Rubinfeld: Section 12.6
|L15||Limiting Market Power |
U.S. vs. Microsoft®
Common Property Resources
"Executive Summary of the Antitrust Laws." Kaye, Scholer's Antitrust Deskbook. New York: Kaye, Scholer, Fierman, Hays & Handler, 1992, pp. 3-19.
|L16||Auctions and Bidding |
Alternative Forms of Auctions and their Characteristics
The Winner's Curse
|Pindyck and Rubinfeld: Section 13.9|
|L17||Transfer Pricing and Vertical Integration |
Transfer Pricing in the Vertically Integrated Firm
Transfer Pricing with Outside Markets
Costs and Benefits of Vertical Integration
|Pindyck and Rubinfeld: Appendix to Chapter 11|
|L18||Incentives and Information |
Principal-agent Problem and Incentives
Promotion Tournaments and Up-or-out Policies
|Pindyck and Rubinfeld: Chapter 17.4|
|L19||Information and Market Structure |
Markets with Asymmetric Information
Quality Uncertainty and the Market for "Lemons"
|Pindyck and Rubinfeld: Chapter 17.1-17.3|
|L20||Externalities and Market Structure |
Positive and Negative Externalities
Market Failure and Forms of Government Intervention
|Pindyck and Rubinfeld: Sections 18.1-18.4|
Lieber, Ron. "Credit-Card Companies Escalate Battle of the Perks." The Wall Street Journal Online, 14 September 2004.
Cox, James. "Some see Bush sheltering sugar for votes." USAToday.com, 10 February 2004.
Waddington, Richard. "WTO Hits EU Again Over Sugar Sales." Yahoo! News, 8 September 2004.
Shlaes, Amity. "More PDA Pleasures for Your dollar." FT.com: Financial Times, 20 September 2004.
Carty, Sharon Silke. "GM to Start Loan Blitz for '04 Models." The Wall Street Journal Online, 22September 2004.
Markoff, John. "Sun Alters Its Pricing Strategy For Sales to Developing Nations." Business/Financial Desk, The New York Times, 1 June 2004.
Guth, Robert A. "Microsoft Tests Low-Price Windows." The Wall Street Journal Online, 30 September 2004.
Kranhold, Kathryn. "Nuclear-Power Industry Sees Signs of a U.S. Revival." The Wall Street Journal Online, 9 November 2004.