ECON 3516 - Industrial Organisation III

North Terrace Campus - Semester 1 - 2017

This course in applied microeconomics is concerned with the behaviour and performance of firms in markets, with a particular focus on strategic interactions. It goes beyond the perfectly competitive model by considering the nature of market power and how that affects firm behaviour and subsequently consumers and policy-makers. Topics covered may include theories of monopoly, price discrimination, oligopoly, auctions, vertical and horizontal integration, economies of scale and scope, network externalities, and regulation.

  • General Course Information
    Course Details
    Course Code ECON 3516
    Course Industrial Organisation III
    Coordinating Unit Economics
    Term Semester 1
    Level Undergraduate
    Location/s North Terrace Campus
    Units 3
    Contact Up to 3 hours per week
    Available for Study Abroad and Exchange Y
    Assumed Knowledge ECON 2009 or ECON 2506
    Assessment Typically a project, assignments, mid-semester test & final exam
    Course Staff

    Course Coordinator: Associate Professor Paul Pezanis-Christou

    Office location: Nexus 10, Level 4, Room 4.09
    Telephone: 8313.4928
    Course Timetable

    The full timetable of all activities for this course can be accessed from Course Planner.

  • Learning Outcomes
    Course Learning Outcomes

    On successful completion of this course, students will be able to:

    1. Explain how price and non-price competition among firms affect economic welfare.
    2. Explain how market structure affects behaviour and vice versa.
    3. Analyse and evaluate models of monopoly, oligopoly and competitive markets.
    4. Analyse basic antitrust and regulatory policy issues.
    University Graduate Attributes

    This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

    University Graduate Attribute Course Learning Outcome(s)
    Deep discipline knowledge
    • informed and infused by cutting edge research, scaffolded throughout their program of studies
    • acquired from personal interaction with research active educators, from year 1
    • accredited or validated against national or international standards (for relevant programs)
    Critical thinking and problem solving
    • steeped in research methods and rigor
    • based on empirical evidence and the scientific approach to knowledge development
    • demonstrated through appropriate and relevant assessment
    Career and leadership readiness
    • technology savvy
    • professional and, where relevant, fully accredited
    • forward thinking and well informed
    • tested and validated by work based experiences
  • Learning Resources
    Recommended Resources
    Introduction to Industrial Organization, L. Cabral, MIT Press, 2000.

    Modern Industrial Organization, by D. Carlton and J. Perloff, Pearson Addison Wesley, 4th Edition, 2005.

    Industrial Organisation: A Strategic Approach, by J. Church and R. Ware, McGraw-Hill, 2000. Freely available at:
    Online Learning
    Lecture notes, recordings and assignments will be posted on MyUni.
  • Learning & Teaching Activities
    Learning & Teaching Modes

    Lectures are held once a week starting in the first week. You are expected to have read the relevant material. The lecture is designed to summarise the topic, explain concepts, stress important points and work through examples. You will gain more benefit from the lecture if you read the relevant section of the textbook before coming to the lecture.


    Tutorial classes will be held weekly commencing in the second week of semester. Tutorials are designed to elaborate on the material presented in the previous week’s lecture. It is a chance to work thought examples, ask questions and discuss issues. 
    Membership of tutorial classes is to be finalised by the end of the first week of semester. Students wishing to swap between tutorial classes after this time are required to present their case to the Lecturer-in-Charge, but should be aware that such a request may not be approved.

    The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

    "The information below is provided as a guide to assist students in engaging appropriately with the course requirements.
    As a guide, a 3 unit course comprises a total of 156 hours work (this includes face-to-face contact, any online components, and self-directed study)."
    Learning Activities Summary
    Teaching & Learning Activities Related Learning Outcomes
    Lectures 1 - 4
    Tutorials 1 - 4
    Week Topic
    1 Introduction and review of main concepts
    2 Monopoly: Sources of market power
    3 Monopoly: Nonlinear pricing and price discrimination
    4 Static models of oligopoly
    5 Dynamic models of oligopoly
    6 Product differentiation
    7 Entry deterrence
    8 Mid-term exam 
    9 Predatory pricing
    10 Vertical integration and vertical restraints 
    11 Horizontal concentration
    12 Optimal pricing for natural monopoly
  • Assessment

    The University's policy on Assessment for Coursework Programs is based on the following four principles:

    1. Assessment must encourage and reinforce learning.
    2. Assessment must enable robust and fair judgements about student performance.
    3. Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
    4. Assessment must maintain academic standards.

    Assessment Summary
    Assessment Task Due Date/ Week Weight Length Learning Outcomes
    Weekly Assignments (individual work) Week TBA 20% TBA 1 - 4
    Midterm Exam Week TBA 30% TBA 1 - 3
    Final Exam Week TBA 50% TBA 2 - 4
    Total 100%
    Assessment Detail
    Tutorials: Every week, the tutor will randomly select one of the assigned exercises to be graded. The grade for the selected exercise will be 0, 1, 3 or 5, depending on the quality of the answer provided. Particular attention will be given to the work out of the exercise’s solutions. The solutions’ work out will be ‘documented’ if it shows the details of the calculations performed (if any) and the reasoning used to reach the reported answers or solutions.
    The grading rule to be used is: 0: no attempt to do the selected exercise, 1: a majority of incorrect or undocumented answers, 3: a majority of correct and documented answers, 5: all answers are documented and correct.
    Attendance to the tutorial meetings is compulsory. If, owing to exceptional circumstances, you are unable to attend your usual tutorial, you may try to attend another tutorial session. Occasional absence will be tolerated only once during the semester. If you are unable to attend a tutorial for medical reasons, you should provide a medical certificate. If the medical certificate covers a period longer than a week, you will need to organise some other arrangements with the lecturer. The same applies if you provide more than two medical certificates during the semester. Collaboration on assignments is allowed and encouraged, but final solutions must be written independently. Each student should participate fully in solving each problem and understand the answer.
    The grade for the tutorial is determined by the average of the eight best grades obtained for the assignment.

    Mid-Term Examination: Failure to sit the mid-term examination will result in receiving zero points, whether a medical certificate is provided or not. The grade of the final exam will then account for 80% of the overall grade.

    Final Examination: This exam will be held in the University examination period and will be two hours long. It will be on materials from the entire course though approximately 60% of the questions will be from post-midterm topics.
    No late assignments will be tolerated. Failure to hand in an assignment will result in a zero mark.

    Assignments must be handed in at the Professions Student Hub, located at Nexus 10 (corner of Pulteney St and North Tce).

    Unless special arrangements have been made, no assignment will be collected by your lecturer.

    Each assignment should include a signed copy of the University’s cover sheet.

    Assignments will be handed back at tutorials meetings. The last assignment will be available for collection at the hub only.

    There will be no alternative assessment opportunities.
    Course Grading

    Grades for your performance in this course will be awarded in accordance with the following scheme:

    M10 (Coursework Mark Scheme)
    Grade Mark Description
    FNS   Fail No Submission
    F 1-49 Fail
    P 50-64 Pass
    C 65-74 Credit
    D 75-84 Distinction
    HD 85-100 High Distinction
    CN   Continuing
    NFE   No Formal Examination
    RP   Result Pending

    Further details of the grades/results can be obtained from Examinations.

    Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

    Final results for this course will be made available through Access Adelaide.

  • Student Feedback

    The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

    SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy ( course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.

    The material covered in this course is marginally reviewed every year so as to better suit the students’ needs.
  • Student Support
  • Policies & Guidelines
  • Fraud Awareness

    Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

The University of Adelaide is committed to regular reviews of the courses and programs it offers to students. The University of Adelaide therefore reserves the right to discontinue or vary programs and courses without notice. Please read the important information contained in the disclaimer.