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

• Learning outcome

  Knowledge

  Upon completion of the course, students can:

  • Explain basic game theoretical concepts and apply it to strategic interaction between firms

  Skills

  Upon completion of the course, students can:

  • Discuss strategic interactions between firms in a specific market
  • 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
  • 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 can:

  • Distinguish between relevant theoretical models for firm behavior and combine theory and factual data
  • Identify the strategic environments firms interact in and find their optimal strategies from verbal descriptions in individual assignments within a group activity

• Teaching

  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.

  In addition there will be (i) a discussion in groups of exercises and (ii) two mandatory assignments that will be reviewed in class.

• Recommended prerequisites

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

• Compulsory Activity

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

• Assessment

  Four hours individual written school exam. The exam will be written by pen and paper.

  An assessment will not be organised in the the non-teaching semester (spring).

• Grading Scale

  A-F.

• Computer tools

  None.

• Literature

  The following textbook:

  D. W. Carlton and J. M. Perloff: Modern Industrial Organization, Pearson.

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

• Permitted Support Material

  Calculator

  One bilingual dictionary (Category I)

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support material https://www.nhh.no/en/for-students/regulations/https://www.nhh.no/en/for-students/regulations/and https://www.nhh.no/en/for-students/examinations/examination-support-materials/https://www.nhh.no/en/for-students/examinations/examination-support-materials/