The strategic interaction between firms and the dynamics of competition between them in different markets are both interesting from a theoretical point of view and important from an applied policy perspective. What competitive weapons do firms use? Which strategies can firms use to soften competition? To what extent are mergers driven by efficiency or by market power considerations? Throughout the module, we will ask the question of when, and how, the government should intervene to facilitate the competitive process. The module covers theories that are key to understanding firm strategies and the basis for regulatory intervention. During the module, we will deal with issues that are present in everyday news such as anti-competitive practices, the effect of market power on consumer welfare and the incentives for product innovation, private and public effects of mergers. You will have the chance to discuss and understand many of these topics in a more structured and economically informed way.
Lecture 22, Workshop 10
Portfolio. Assessment Details: 5x problem sets (4% each) worth 20%.
Report. Assessment Details: 3000 words Technical Report worth 80%.
Reassessment Method: Single Instrument, 100% written assessment (Technical Report 3,000 words).
On successfully completing the module, students will be able to:
1) Draw on a systematic understanding of how firms’ decisions regarding price, advertising and R&D, etc. can be modelled and evaluate the impact of those decisions on the structure and performance of markets.
2) Deploy accurately and apply established techniques of game theory to the analysis of firm’s strategic behaviour.
3) Identify the implications of the theory for the design and implementation of industrial policy and to critically evaluate the application of industrial policies in the UK and other countries.
4) Critically evaluate economic models of firm behaviour to analyse questions in business strategy, competition policy and regulation and communicate their implications to both specialist and non-specialist audiences.
5) Demonstrate self-direction and originality in tackling problems related to various aspects of strategic interaction between firms and the determinants of industrial structure.
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