1. Industrial Organization
Econ 330 (MGEC 330)
Industrial Organization
Murat Usman

2. Lecture plan Sept 18 2012 Syllabus
Book. LN. Study tips. Exams. Make ups, early finals. Grading.
Ec201 and Ec333 – Microeconomics and Game Theory
People on the waiting list: priorities Prof İnsan Tunalı
My course recommendations
Short Intro to what is IO?

3. What is IO?
Industrial organization (or Industrial Economics) is concerned with the workings of markets, in particular, the way firms interact and compete with each other.
Industry ≠ manufacturing
IO is subject matter of microeconomics  IO is a chapter of Micro. [there is no subject as IO]

4. Difference : IO emphasizes firm strategies that are characteristic of market interaction: price competition, product positioning (differentiation), advertising, R&D, etc. 
Micro : Monopoly or Perfect competition
IO : oligopoly – competition among a few firms
IO : economics of imperfect competition

5. Book
Luis Cabral, “Introduction to Industrial Organization”, available at the Campus Bookstore.
Book website:

6. Prereqs (Cabral’s book)
Ch 2 for basic Microeconomics
Ch 4 for basic Game Theory

7. Grading Very simple: One midterm One final.
Midterm: Thursday, November 15, at regular class time (the exam room will be announced later).
Final: to be scheduled by the Registrar’s Office. (Jan 4 to Jan 14).
MAKE UPS: not more difficult than regular exams. Must have a valid excuse. Make-up finals scheduled Jan 17 to18.

8. 30% Midterm Exam.
50% Final Exam.
20% “Wild Card”. Your best exam grade will be given an added weight of 20 percent. For example, if you do very well on the final exam it will be weighted at 70 percent.
10% Bonus. For class participation and assignments.

9. Class participation and assignments
10-point BONUS
In class experiments and activities
Short reading assignments?
Please always bring a pencil and a piece of paper to class

10. Lecture Notes.
Study tips.
Exams.
Make ups (already mentioned)
Early finals.

11. Recommendations (Fall 2012)
ECON. 322 INTERNATIONAL FINANCE REHİM KILIÇ ECON 483 TRACKING THE TURKISH ECONOMY MURAT UÇER MFIN.301/EFIN.301 CORPORATE FINANCE HAN ÖZSÖYLEV ADVANCED MACROECONOMICS HAN ÖZSÖYLEV

12. Recommendations for spring term
ECON.333/MGEC.333 GAME THEORY AND STRATEGY ECON.331/MGEC.331 COMPETITION AND MARKET STRUCTURE

13. The 4 central questions in IO
(1) Is there market power?
(2) How do firms acquire and maintain market power?
(3) What are the implications of market power?
(4) Is there a role for public policy regarding market power?

14. What is market power?
Market power is the ability to set prices above cost, especially above incremental or marginal cost. What is marginal cost? Marginal cost is defined as the cost of producing one extra unit.