Concordia University

Department of Economics

ECON 361 Industrial Organization

COURSE OUTLINE
Winter 2020

Instructor: Uma Kaplan Office: H 1155.43

E-mail: uma.kaplan@concordia.ca Office hours: M 3:00PM-4:00PM
Schedule: We 6:00PM - 8:15PM Location: H 439 SGW

Course Objectives:
Industrial organisation focuses on the use of economic analysis in the study of competition between
firms and the evolution of market structure. This has been one of the most exciting areas of
economics in the past decade, since a new generation of game-theoretic models have allowed us to
analyse a variety of important real-world issues, and address some long-standing empirical questions.

This course develops the relationship of the firm to various forms of market structure and examines
current policy issues concerning firm behaviour in an analytical framework. It focuses on the
objectives of the corporation, corporate interdependence, and the government control of industry.
First, we will develop a general theory of imperfect competition, while highlighting its applicability
to policy along the way. Second, the general models are tailored to more specific policy questions.
Finally, the tailored models are deployed, along with institutional knowledge and industry data, to
analyse policy issues in various industries. The study of policy issues will focus on anti-trust and
corporate regulation, with respect to both the legislative and economic aspects.

Pre-requisites:
The pre-requisites for this course are Econ 201 and Econ 203.

Required Textbook:
There is no required textbook for this course. However, I can recommend some useful background
texts:
1. Stigler, G., (1968), The Organization of Industry, University of Chicago Press. The classic text on
industrial organization.
2. Tirole, J. (1988) The Theory of Industrial Organization, MIT Press. The text that analyzes many
game theoretic models in industrial organization.
3. Carlton and Perloff (1994) Modern Industrial Organization, Harper and Collins. A standard
undergraduate industrial organization textbook:

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4. Stokey, Lucas and Prescott (1989) Recursive Methods in Economic Dynamics Harvard University
Press. The classic text on the theory of dynamic models.
Additional course notes and/or required readings from published papers will be selectively made
available on Moodle.

Additional References:
-Pepall, L. Richards, D., and Norman G (2005), Industrial Organization: Contemporary Theory and
Practice, Thomson.
-Motta M (2004) Competition Policy: Theory and Practice, Cambridge University Press.
-Perloff, Karp and Golan, (2007) Estimating Market Power and Strategies, Cambridge University
Press.
-Einav, Liran and Levin Jonathan (2010) Empirical Industrial Organization. A Progress Report,
Journal of Economics Perspectives, 2, 145-162.

Moodle Website:
Important information regarding general course conduct and exams will be posted on Moodle.
Students are expected to keep up to date with the course information provided on this website.

Office Hours:
My office hours are on Monday 3:00PM-4:00PM.

Communication and Correspondence:

For administrative questions, you can come see me after class/during office hours, or send me an e-
mail. All correspondence in this class will be directed through Concordia e-mail addresses only.
Please enter the course number in the subject heading of your e-mail.
Discussion of course subject material will not be entered into via lengthy e-mails. All enquiries about
the subject material should be made at lectures or during office hours.

Lectures:
The course will have both lecture and discussion components. Lectures will cover analytical tools as
well as findings from empirical studies by economists that help guide the use of those tools. Students
are expected to do all of the required readings prior to the class where they will be discussed.
Discussions will explore current challenges in industrial organization, informed by published papers,
media accounts and less-formal writing by economists and other experts.

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Attendance:
Attendance is mandatory. Any material or discussion points raised in the lectures may end up in the
examinations. If you miss a lecture, it is your responsibility to arrange with a classmate to borrow
his/her notes.

Use of Technology in Class:

Laptop/tablet use is permitted in the classroom, however it is restricted for class-related activities only.

Evaluation:
- Assignment: 10% (in class, TBA);
- Midterm Exam 40% (in class, February 19);
- Final Exam: 50% (to be scheduled by the Examinations Office).

Exams:
Exams are closed-book, closed-notes. They will test understanding of concepts taught in lectures,
and the ability to apply these insights to various situations. Exam material will be taken from the
lecture notes, case studies and assigned readings. They will consist of a combination of multiple choice
questions, short problems and/or short essay questions. The final exam is cumulative and will cover the
whole course content and material.

Students who miss the midterm exam for valid reasons (such as physician-documented illness) must
contact me immediately. Students missing the mid-term exam without instructor approval will get a
mark of zero for that exam. There are no supplemental assignments or make-up exams in this
class. If you miss the midterm examination for a valid medical reason, the weight will be allocated to
your final exam.

Assignment:
There will be one assignment, worth 10 % of your final grade, which will be posted on Moodle.
The assignment will help students check the progression of their learning and prepare for the exam.
Students may work individually, or in groups of up to three and hand in a joint assignment. Clean,
readable, handwritten or typed solutions are to be submitted in on the due date, at the start of class.
Other than for documented medical reasons, missed deadlines result in a mark of zero.

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Reading List:
This outline approximates the trajectory of the course through the semester. Please note that the
schedule is tentative. Due to statutory holidays and potential active class participation, some course
material assigned may not be covered in their entirety, while other additional topics may be
discussed and tested in the exam. As a result, students should attend classes regularly. Also, to
facilitate understanding, students are encouraged to read the assigned readings ahead of time.

Topics
1. Introduction to Market Power and Public Policy
2. Imperfect Competition
3. Monopoly
4. Oligopoly
5. Antitrust and Merger Policy
6. Predation
7. Collusion and Cartel Formation
8. Bargaining
9. Auction Theory
10. Vertical Markets

Academic Policies and Regulations:

Concordia University values academic integrity. Therefore all students must understand the meaning
and consequences of cheating, plagiarism and other academic offences under the Academic Code of
Conduct (see https://www.concordia.ca/students/academic-integrity.html for more information).

Students with diverse learning styles and needs are always welcome in this course. In particular, if
you have a disability or health consideration, which may require accommodation, please feel free to
approach me in person and/or contact Access Centre for Students with Disabilities (ACSD).

Disclaimer
In the event of extraordinary circumstances beyond the University’s and/or instructor’s control, the
content and/or evaluation scheme in this course is subject to change.
While it is unlikely that significant changes to the course outline will materialize, students are
required to keep up with the materials posted on the Moodle website, where any changes will be
posted.