PREREQUISITE: ECON-UA 11 WITH A MINIMUM GRADE OF C.
Designed to familiarize students with a modern approach to industrial organization economics. The modern approach relies extensively on the use of game-theoretic tools to model strategic market behavior and the use of econometric methods for testing hypotheses regarding firm conduct and market performance. In particular, the course analyzes profit-maximizing business strategies of firms with market power as well as strategic interactions among firms in various types of imperfectly competitive markets. The course addresses both static modes of competition as well as dynamic competition in research and development and product design. The course also examines the scope of effective public policies designed to improve market performance. Throughout the course, mathematical-based models are used to develop the relevant concepts and test the pertinent theories of firm behavior.