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.
Table for Readings
| 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 |
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
Data on Airline Costs
Argote, L., and D. Epple. "Learning Curves in Manufacturing." Pittsburgh, PA: Carnegie Mellon University, Tepper School of Business, 1990. GSIA Working Papers No. 89-90-02.
Ghemawat, P. "Building Strategy on the Experience Curve." Harvard Business Review 63 (March-April 1985): 143-49.
|
| 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
Volume Pricing
Commodity Bundling |
Pindyck and Rubinfeld: Sections 11.4-11.5 |
| 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 |
Pindyck and Rubinfeld: Sections 12.2-12.3 |
| 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 |
Pindyck and Rubinfeld: Chapter 12.4-12.5, 13.1-13.6
Pfeifer, Phillip E. and James V. Gelly. "Lesser Antilles Lines: The Island Of San Huberto." Charlottesville, VA: Darden, University of Virginia, 1991. Case No. UVA-QA-0355. (no class preparation required - analyzed in Homework set 5)
|
| L14 |
Collusion and Competition in Oligopolistic Markets
Tacit Collusion
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
Antitrust Laws
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.
McGahan, Anita and Julia Kou. "Microsoft® Corp.'s Pricing Policies." Boston, MA: Harvard Business School, 1995. Case No. 9-975-173).
Lecture Notes on Common Property Resources
|
| 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
Double Marginalization
Costs and Benefits of Vertical Integration |
Pindyck and Rubinfeld: Appendix to Chapter 11 |
| 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 |
Pindyck and Rubinfeld: Chapter 17.4 |
| L19 |
Information and Market Structure
Markets with Asymmetric Information
Quality Uncertainty and the Market for "Lemons"
Adverse Selection
Signaling |
Pindyck and Rubinfeld: Chapter 17.1-17.3 |
| L20 |
Externalities and Market Structure
Positive and Negative Externalities
Market Failure and Forms of Government Intervention
Property Rights |
Pindyck and Rubinfeld: Sections 18.1-18.4 |
| L21 |
Final Examination |
|
Current Events Readings
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.