Winter
term 2000-2001
prof.
Leonid
Polischuk
The content
of the course is the analysis of the behavior of the producers
and sellers
in the markets
with imperfect competition. The course includes the following
topics
1. Monopoly
on the markets for durable goods.
Coase hypothesis,
market for recycled good, selfcompetition and the problem of credible
commitment. Leasing of durable goods.
2. Monopoly
and product differentiation.
Vertical and
horizontal differentiation of the product space. Choice of product
quality: comparison with social optimum. Control of the quality
of durable goods. Diversity of the range of products.
3. Monopoly
and asymmetric information.
Search,
experience and credence goods. Unobservability of the quality
and insurance
of consumers
(for low quality). Price as a signal for quality. Goodwill prices.
Dynamic
quality control and the reputation of the seller.
4. Network
externalities.
The notion
of network externality. The choice of the network standards.
Analysis of
the effectiveness of the network standards. The problem of coordination
in the choice of the network standards.
5. Advertising
in the markets with imperfect competition.
Informative,
persuasive and signaling advertising. Advertising policy by a
monopoly.
The intensity
of advertising: market equilibrium and social optimum.
6. Vertical
Control.
Integrated
monopoly and externalities of the vertical interaction of monopolies.
Methods of
the vertical control. Informational and legal constraints. Limits
on the retail competition.
7. Strategic
behavior under imperfect competition.
Mechanisms
of imperfect competition. Strategic complementarity and substitutability.
8. Entry,
accommodation and exit.
Strategies
of incumbent firm : blocking, deterrence and accommodation of
entry.
Monopoly rent
dissipation. Markets with free entry. Investment in capacity.
“War of attrition”. Limit pricing as the mean of control over
market.
9. Monopoly
and technological progress.
Estimation
of the gain from innovation from the point of view of the society,
monopoly and competitive firm. Incentives for innovation for the
monopoly.
Analysis of
the effectiveness of the use of resources for innovation.
Possible ineffectiveness
of “patent races”.
The main textbook
for the course –
J. Tirole,
The Theory of Industrial Organization,1993.
The additional
textbook - O. Shy, Industrial Organization, 1995
Grading :
There will
be midterm and final examinations.
The course
grade is determined by the following formula:
Max {final,
(2/3)*final+(1/3)*midterm}
|
