ECC4840

Economics of industry, institution and organisation

Dr He-ling Shi, Associate Professor Ian Wills and Dr Xiaokai Yang

7 points · Two 1.5 hour lecturers per week · Second semester · Clayton · Prerequisite: ECC2000 or equivalent or ECC2830

Objectives On completion of this subject students should be familiar with the modern developments of the theory of industrial organisation; upgrade their knowledge on intermediate microeconomics by incorporating information and endogenous transaction costs into analysis; be able to undertake theoretical and empirical research in the field of industrial organisation.

Synopsis Theories of the firm, contract, property rights structure, market structure, hierarchy, bargaining, principal-agent relationship, research and development, advertising, and entry, exit, and pricing strategy. The equilibrium implications of the internal organisation of a firm and the organisational structure of the market are examined in relation to strategic interactions between agents, information problems and related incentive mechanisms. Basic game theory and concepts of game equilibrium will be taught and applied to the analysis of opportunistic behaviour and related transactions costs.

Assessment Written (3000-word essay): 30% · Examination (3 hours): 70%

Prescribed texts

Tirole J The theory of industrial organisation MIT Press, 1988

Recommended texts

Fudenberg D and Tirole J Game theory MIT Press, 1991
Kreps D A course in microeconomic theory Harvester, 1990

Back to the 1999 Business and Economics Handbook