Description and Objectives
This is a course in applied Industrial Economics, often also termed "Industrial Organization". It is the field in Business Economics that studies how markets work and how firms compete - e.g. what their strategies are. Students are enabled to analyze and interpret firms’ strategies and government actions from strategic management and economic policy perspectives.
Students will be endowed with an introductory level of theoretical and practical skills relevant for a career in management, economic policy or business consultancy, to name just a few appropriate job areas. The course will prepare those students who wish to further specialize in this area for more advanced level classes. However, other students who wish to specialize in other areas of economics and business will be endowed with a working knowledge of concepts that should be useful in their future careers.
A central question of this course is how firms’ should formulate their strategies given their expectations about the behavior of their rivals and the business environment. The course aims to enable students develop business strategies and public policies in various different market situations. During the course, sufficiently many real life examples in class will be provided and by means of in class discussions, students will be asked to interpret these cases in light of the knowledge acquired within the course.
Students taking this class should be familiar with basic concepts in Microeconomics and Game Theory. This background is provided in the courses "Strategie und Wettbewerb I" and "Mikroökonomik II".
Textbook and Lecture Notes
The course will follow the topics in:
“An Introduction to Industrial Organization”, by L. M. Cabral, MIT Press, 2000.
This is the main text and it will be supplemented with lecture notes.