EFMD EQUIS CREDITED Industrial Organization Lecture 1 學火旦 2- Binglin gong 于 udan university
Binglin Gong Fudan University Industrial Organization Lecture 1
about The lecturer Lecturer: Binglin Gong Office: Siyuan Building, Rm. 332 Phone:25011080 Emailblong@fudan.edu.cn Office hours: Monday 9: 30-11: 30 My research fields: Industrial organization Experimental Economics, Microeconomics
About The Lecturer • Lecturer: Binglin Gong • Office: Siyuan Building, Rm. 332 • Phone: 25011080 • Email: blgong@fudan.edu.cn • Office hours: Monday 9:30-11:30 • My research fields: Industrial Organization, Experimental Economics, Microeconomics
Textbooks Textbook Oz Shy, 1996, Industrial Organization, Theory and Applications, The MIT Press Reference Carlton, Dennis and Jeffrey perloff, 2004 Modern Industrial Organization, Prentice Hal Tirole, Jean, 1988, The Theory of industrial Organization, Cambridge, MA: The MIT Press
Textbooks Textbook: • Oz Shy, 1996, Industrial Organization, Theory and Applications, The MIT Press. Reference: • Carlton, Dennis and Jeffrey Perloff, 2004, Modern Industrial Organization, Prentice Hall. • Tirole, Jean, 1988, The Theory of Industrial Organization, Cambridge, MA: The MIT Press
Grading Class performance real Life examples 30% Assignments 30% Final exam 40% Students are encouraged to relate real life problems to what we learn in class. You can either bring them up by responding to my questions on class or writing them down and submit them to me You are also welcome to present your examples on class
Grading • Class Performance & Real Life Examples 30% • Assignments 30% • Final Exam 40% • Students are encouraged to relate real life problems to what we learn in class. You can either bring them up by responding to my questions on class or writing them down and submit them to me. You are also welcome to present your examples on class
Whats Industrial organization http://en.wikipediaorg/wiki/industrialorganization In economics, industrial organization is a field that builds on the theory of the firm by examining the structure of(and, therefore, the boundaries between) firms and markets
What’s Industrial organization? http://en.wikipedia.org/wiki/Industrial_organization • In economics, industrial organization is a field that builds on the theory of the firm by examining the structure of (and, therefore, the boundaries between) firms and markets
What's Industrial organization? (Cont Industrial organization adds real-world complications to the perfectly competitive model, complications such as transaction costs limited information, and barriers to entry of new firms that may be associated with imperfect competition. It analyzes determinants of firm and market organization and behavior as between competition and monopoly including from government actions
What’s Industrial organization? (Cont.) • Industrial organization adds real-world complications to the perfectly competitive model, complications such as transaction costs, limited information, and barriers to entry of new firms that may be associated with imperfect competition. It analyzes determinants of firm and market organization and behavior as between competition and monopoly, including from government actions
Definitions of market The world of commercial activity where goods and services are bought and sold 2. A market is a mechanism which allows people to trade, normally governed by the theory of supply and demand, so allocating resources through a price mechanism and bid and ask matching so that those willing to pay a price for something meet those willing to sell for it en.wikipedia. org/wiki/Market 3. The central function of markets is to coordinate allocations of resources.( Cason 2000)
Definitions of Market 1. The world of commercial activity where goods and services are bought and sold. 2. A market is a mechanism which allows people to trade, normally governed by the theory of supply and demand, so allocating resources through a price mechanism and bid and ask matching so that those willing to pay a price for something meet those willing to sell for it. ... en.wikipedia.org/wiki/Market 3. The central function of markets is to coordinate allocations of resources. (Cason 2000)
Introduction Two extreme market forms/structures(in the sense of many extreme assumptions made) Having extreme market forms in picture however helps Perfect Monopoly competition PC-Ideal market form(analogous to frictionless surface in physics) Monopoly- Under certain conditions, the least desirable market organization Industrial organization- Study of market organizations in between these two extremes
Introduction • Two extreme market forms/structures (in the sense of many extreme assumptions made). • Having extreme market forms in picture however helps. • PC- Ideal market form (analogous to frictionless surface in physics) • Monopoly- Under certain conditions, the least desirable market organization. • Industrial organization- Study of market organizations in between these two extremes
how do we do that? By relaxing the assumptions of the two extreme market forms
How do we do that? By relaxing the assumptions of the two extreme market forms
Four facts Our approach to analyzing industry behavior is based on four stylized facts >Concentration >Product characteristics Costly activities > Research and development (Oz Shy PI
Four Facts Our approach to analyzing industry behavior is based on four stylized facts: Concentration Product Characteristics Costly activities Research and development (Oz Shy P1)