BS3572: Industrial Economics

School Cardiff Business School
Department Code CARBS
Module Code BS3572
External Subject Code 100449
Number of Credits 20
Level L6
Language of Delivery English
Module Leader Dr Helmuts Azacis
Semester Double Semester
Academic Year 2013/4

Outline Description of Module

Provide students with an up-to-date understanding of industrial economics, including the areas of industrial organisation and regulation, at a third year undergraduate level.

Make students aware of the relevant theory in these areas.

Make students aware of empirical work that has been undertaken in some areas relating to the operation and performance of UK markets.

Make students aware of key policy issues and the way in which economic analysis can be used to approach these issues.

Provide students with subject specific and core skills which will be of use in further education and their future careers.

On completion of the module a student should be able to

A     Knowledge and Understanding:

  • understand modern issues in the theory of industrial organisation
  • understand recent UK Competition Policy and natural monopoly regulation
  • understand the role of empirical research in testing economic theory and in assessing economic policy

B     Intellectual Skills: 

  • recognise the importance of economic theory to the analysis of the industrial economy and be able to apply theory to applied economic problems.
  • appreciate the main causes of market failure and distortion in the context of industry, and be able to indicate their welfare consequences
  • analyse economic policy in this area and identify the merits of individual policy measures

C     Discipline Specific Skills: 

  • employ deductive reasoning to analyse economic problems
  • analyse data and interpret statistical information
  • understand and evaluate the role of incentives and strategic thinking in determining firm and government behaviour and therefore market outcomes and policy

D     Transferable Skills: 

  • work individually and independently on lecture and tutorial material
  •  develop reading skills in specific subject areas

How the module will be delivered

Teaching takes place in the Autumn and Spring semesters.  There are approximately 36 hours of lectures and 8 hours of classes. 

The purpose of lectures is to set out the main points of each topic covered and indicate a structure for learning.  They identify the key features of the topics covered and focus particularly on material new to students, and on the technically more difficult elements. They aim to improve student learning by identifying the principal theoretical and empirical aspects on each topic, and by providing guidance on reading. Lecture handouts provide the students with mathematical material, statistical data and diagrams.

Classes provide students with an opportunity to discuss module material. Theoretical ideas introduced in the lecture are identified and therefore consolidated with the help of numerical and essay style problems.  Statistical data, diagrams and quantitative material may also be reviewed.  The reading material and associated tasks introduce empirical material and policy debates.

Students are provided with text references and handouts but are required to supplement these by consulting articles available in the library.

Indicative study hours:   200

How the module will be assessed

The summer examination is divided into three sections: Section A covers the first half (first semester) of the module and Sections B and C the second. The questions take a variety of forms enabling the student to demonstrate their knowledge and skills across theoretical, quantitative, diagrammatic, empirical and policy material. 

Assessment Breakdown

Type % Title Duration(hrs)
Exam - Autumn Semester 30 Industrial Economics 2
Exam - Spring Semester 70 Industrial Economics 3

Syllabus content

Monopoly: non-linear pricing and price discrimination, product quality; Oligopoly pricing: static and dynamic models of oligopoly, product differentiation, measuring market power; Strategic behavior: entry deterrence, advertising, research and development; Issues in antitrust economics: exclusionary strategies, vertical integration and vertical restraints, horizontal mergers; Issues in regulatory economics: optimal pricing for natural monopoly.

Essential Reading and Resource List

L. Cabral, Introduction to Industrial Organization, MIT Press, 2000.

D. Carlton and J. Perloff, Modern Industrial Organization, Pearson Addison Wesley, 2005.

J. Church and R. Ware, Industrial Organization: A Strategic Approach, McGraw-Hill, 2000.

M. Motta, Competition Policy: Theory and Practise, Cambridge University Press, 2004.

L. Pepall, D. Richards, and G. Norman, Industrial Organization: Contemporary Theory and Empirical Applications, 4th ed., Blackwell Publishing, 2008.


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