Course Information
Course title
Industrial Organization and Firm Strategy 
Semester
110-2 
Designated for
COLLEGE OF SOCIAL SCIENCES  GRADUATE INSTITUTE OF ECONOMICS  
Instructor
FONG PO HAN 
Curriculum Number
ECON5107 
Curriculum Identity Number
323EU0260 
Class
 
Credits
3.0 
Full/Half
Yr.
Half 
Required/
Elective
Elective 
Time
Monday 2,3,4(9:10~12:10) 
Remarks
Restriction: juniors and beyond OR Restriction: MA students and beyond OR Restriction: Ph. D students
The upper limit of the number of students: 30. 
Ceiba Web Server
http://ceiba.ntu.edu.tw/1102ECON5107_ 
Course introduction video
 
Table of Core Capabilities and Curriculum Planning
Table of Core Capabilities and Curriculum Planning
Course Syllabus
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Course Description

This course takes a formal approach to analyzing the way firms make production and sales decisions and interact strategically with each other in the marketplace. We begin with a study of optimal pricing policies, including versioning, bundling, and related market segmentation strategies. In the second part of the course, we analyze strategies for firm dominance, especially
through the deterrence of potential competition. The list of such strategies includes capacity expansion, product proliferation, and exclusive dealing contracts. In the third part of the course we apply game theory to the study of oligopoly interaction, focusing on pricing and output strategies in a dynamic setting. In the final part or the course we introduce some of the most useful cutting-edge analytical frameworks in the age of fast technological changes, including those of multi-sided platforms, standard wars and business ecosystems.

This course has a strong entrepreneurial component; we study all the essential issues in the literature of Industrial Organization from the viewpoint of business decision-makers. 

Course Objective
The main goal of the course is to develop the basic intuition for pricing and other forms of strategic behavior on the part of firms, both when faced with complex patterns of consumer demand and when faced with strategic competitors. 
Course Requirement
1. Students are required to have taken a semester of microeconomics. Students are also expected to be comfortable with basic algebra and calculus,
including systems of equations, derivatives, logarithms and NPV calculations.

2. In addition to solving economic models, business case reading and active participation in classroom discussion are crucial activities required for this course. Every student taking or sitting in this course has to pay license fees for Harvard business cases (around NT$300, with the actual amount to be calculated later). 
Student Workload (expected study time outside of class per week)
 
Office Hours
Appointment required. Note: Please arrange an appointment in advance by email. 
Designated reading
1. Lecture Notes based on INTRODUCTION TO INDUSTRIAL ORGANIZATION by Luis Cabral

2. CO-OPETITION by Adam M. Brandenburger and Barry J. Nalebuff

3. INFORMATION RULES by Carl Shapiro and Hal R. Varian

4. MATCHMAKERS by David S. Evans and Richard Schamlensee

5. 7 POWERS: THE FOUNDATIONS OF BUSINESS STRATEGY by Hamilton Helmer

5. Mini Cases by Luis Cabral (free)
・Monsanto’s Roundup
・Wednesdays at Cinemex
・DeBeers

6. Harvard Business Cases (license fees required):
・Rent the Runway
・Cola Wars Continue: Coke and Pepsi in 2010
・Airbnb, Etsy, Uber: Acquiring the First Thousand Customers
・TikTok & Kuaishou
・Artsy: The Rise of Online Commerce
・Gogoro: From Electric Scooter to Energy Platform

7. Honest Tea Business Plan 
References
 
Grading
 
No.
Item
%
Explanations for the conditions
1. 
Final Exam 
50% 
Scheduled on 5/30 
2. 
Assignments & Case Discussion 
40% 
Group Work 
3. 
Quizzes in Class 
10% 
 
 
Progress
Week
Date
Topic
Week 1
2/14  Course Introduction
Topic 1: Basic Pricing Principles 
Week 2
2/21  Topic 2: Entry Deterrence
Case Discussion: Roundup, NutraSweet 
Week 3
2/28  (No Class) 
Week 4
3/07  Topic 3: How to Evaluate a Business Plan?
Case Discussion: Honest Tea, Rent the Runway 
Week 5
3/14  Topic 4: Pricing in Practice
Case Discussion: Wednesdays at Cinemex 
Week 6
3/21  Topic 5: Competition is for Losers 
Week 7
3/28  Experiment: Farmville 
Week 8
4/04  (No Class) 
Week 9
4/11  Topic 6: Oligopoly Competition 
Week 10
4/18  Topic 7: Tacit Collusion
Case Discussion: DeBeers 
Week 11
4/25  Topic 8: Boundaries of the Firm
Case Discussion: Cola Wars 
Week 12
5/02  Topic 9: Two-Sided Market
Case Discussion: Acquire the First Thousand Customers 
Week 13
5/09  Topic 10: Technological Change
Case Discussion: TikTok & Kuaishou, Artsy 
Week 14
5/16  Topic 11: Standard Wars
Case Discussion: Electric Scooters 
Week 15
5/23  Topic 12: Building Business Ecosystem
Case Discussion: Welcome to Metaverse 
Week 16
5/30  Final Exam