SAM15 Firm Strategy and Competition

• Topics

  The course focuses on how game theory can be applied to understand and predict firms' behavior and strategic interaction between firms. During the course the students will be introduced to various cases focusing on specific industries. The main elements in competition policy rules will also be discussed. Thus, we will distinguish between legal and illegal behavior and thereby gain insight in business ethical issues.

  Some of the topics the course will cover are:

  • Market structure and network effects
  • Pricing and price discrimination
  • Static and dynamic games
  • Price and capacity setting in oligopoly
  • Competition vs collusion
  • Product differentiation
  • Asymmetric information
  • Competition with myopic consumers

• Learning outcome

  Knowledge

  Upon completion of the course, students will:

  • Have a broad knowledge about basic game theoretical concepts and be able to apply it to strategic interaction between firms

  Skills

  Upon completion of the course, students will:

  • Be able to discuss strategic interactions between firms in a specific market
  • Be able to analyze outcome in a market, for instance in prices and sales, and evaluate how the outcome might change if the basic assumption about the market structure changes
  • Be able to find, evaluate and refer to information and scholarly subject matter and present it in a manner that sheds light on a problem seen from a firm's perspective

  General competence

  Upon completion of the course, students will be able to:

  • Distinguish between relevant theoretical models for firm behavior and combine theory and factual data
  • Identify and execute individual assignments within a group activity

• Teaching

  Teaching will be conducted in accordance with the Covid-19 regulations that applies when the course is given. If the regulations forbid physical teaching, the course will almost entirely be given on a digital platform (like for instance zoom). 

  Discussion and dialogue in the classroom is important, and there will also be some interactive in-class experiments. Lectures will therefore take place in a physical classroom.

  Lectures will be based on textbook, research articles, case studies, and interactive in-class experiments.

• Recommended prerequisites

  The course requires introductory knowledge in microeconomics, e.g.,  SAM1 and SAM2.

• Compulsory Activity

  All students must pass two out of four assignments during the semester. Assignments can be answered individually or in groups of maximum three students.

• Assessment

  Four hours individual written school exam. All answers must be written in English or Norwegian. If any covid-19 restrictions, we switch to an individual digital take-home exam.

• Grading Scale

  A-F.

• Computer tools

  None.

• Literature

  As the main textbook, students can choose between Church and Ware and Dixit, Skeath and McAdams:

  J. Church and R. Ware (2000): Industrial Organization - A strategic approach, McGraw-Hill.

  A. K. Dixit, S. Skeath and D. McAdams (2020): Games of Strategy, Fifth Edition, W.W. Norton & Company.

  Additional articles and other material will be announced at course start and also later in the course.