Authorised by Academic Registrar, April 1996
Objectives On completion of this subject students should be able to assess the modern developments of the theory of industrial organisation; extend their knowledge on intermediate microeconomics by systematically integrating information, quality, organisation and incentives; 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%