SAM15 Firm Strategy and Competition

• Topics

  The course focuses on firms' different decision problems and strategic interaction between firms. The course will be based on various cases focusing on markets such as airlines, telecommunication, gasoline and the grocery sector. We will aim towards providing an understanding of how economics can be used to understand and predict firms' behavior and strategic interaction. 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 definition
  • Barriers to entry
  • Cartel behaviour
  • Pricing and price discrimination
  • Product differentiation
  • Mergers & acquisitions

• Learning outcome

  Knowledge

  Upon completion of the course, students will:

  • Have a broad knowledge about topics such as market definition, barriers to entry, cartel behavior, pricing and mergers & acquisitions

  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). 

  Lectures that takes place in a physical classroom will be streamed and recorded. All digital meetings will be recorded and made available on the digital learning platform used by NHH, Canvas.

  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.

• Requirements for course approval

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

• Assessment

  Four hours individual written digital take-home exam. All answers must be written in English.

• Grading Scale

  A-F.

• Computer tools

  None.

• Literature

  As the main textbook, students can choose between Church and Ware and Carlton and Perloff, listed below. The lectures will be closest to Church and Ware, but we will also provide references to Carlton and Perloff in the lecture plan. 

  Church J and R Ware (2000). Industrial organization: A strategic approach. McGraw-Hill. This is avaialble online for free at  http://people.ucalgary.ca/~jrchurch/page4/page5/page5.htmlhttp://people.ucalgary.ca/~jrchurch/page4/page5/page5.html 

  Carlton DW and JM Perloff (2015). Modern industrial organization. Fourth edition; Global edition. This is available online from Leganto.

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