Syllabus - University of British Columbia

The University of British Columbia Department of Economics Winter Term 2 ECON 406 001: Topics in Microeconomics

Instructor: Dhimitri Qirjo Class Time: Tue & Thu 9:30–11:00 AM

Class Location: Hennings 304

Office Location: Buchanan Tower 909

Office Phone: (604)-822-4121

Office Hours: Tue & Thu 2:00–3:00 PM and by appointment E-mail: [email protected]

Website: http://faculty.arts.ubc.ca/dqirjo

Pre-requisite Courses Please note that all students registered for this course must have taken one of ECON 301, ECON 304, and one of ECON 303, ECON 306.

Course Description: This course examines relations among market structure, economic efficiency, welfare, and international trade. This class will provide an analysis of firms‟ behavior under different industrial structures, such as perfect & monopolistic competition, oligopoly, and monopoly. Specific topics covered include auctions, advertisement, product differentiation, and their applications in international trade. We will examine how firms create profitable opportunities and respond to competitive threats. We will see how firms‟ profits depend on the structural characteristics of industries in which they participate. We will also examine the firm‟s entry and exit decisions in some industries and analyze the story behind the firms‟ decision whether to export or/and FDI.

Required texts 1) Modern Industrial Organization, by Dennis W. Carlton & Jeffrey M. Perloff, Addison-Wesley 4th Edition, ISBN-10: 0321180232, ISBN-13: 978-031180230. Texts can be purchased new at the University bookstore. The Companion Website for the text is: http://wps.aw.com/aw_carltonper_modernio_4/21/5566/1424930.cw/index.html In the above website you can find chapter by chapter study guide that can help you prepare for the midterm and the final exam. 2) The Economics of the World Trading System, by Kyle Bagwell & Robert W. Staiger, The MIT Press New edition edition (Sep. 1, 2004), ISBN-10: 0-26252434-1, ISBN-13: 978-0-262-52434-6. Texts can be purchased new at the University bookstore.

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Reading the textbook While my lectures are fairly all-inclusive, time constraints do not allow us to go into all of the detail necessary for this course. Therefore, reading the textbooks is an excellent preparation and learning tool. There will be times when my lecture material deviates somewhat from the textbooks (e.g., definitions, the way in which subjects are covered, sequencing, etc.). If you are in doubt, constantly follow my lectures in class and come to visit me during my office hours.

Class Lectures You are expected to attend each class. Just as reading the textbooks will help you to learn the material directly from the authors, attending class provides an opportunity for you to gain a different perspective; both from the instructor and your fellow classmates. In addition, valuable information about homework assignments, exams, and updates to the syllabus will be announced in class. The best way to learn is to solve problems. I might ask questions in class in order to practice the applications of the principles you are learning, not to test or embarrass you. You should feel free to ask questions at anytime during my lectures. I will do my best to answer your questions and also encourage you to answer the questions of your classmates.

Homework Assignments Numerous homework assignments will be given to help everyone prepare for the exams. Class attendance is essential, for the homework assignments must be submitted in class. You are encouraged to work the homework assignments in groups of up to four students, turning in one set of neatly written answers. However, if your answers are not neatly written, I will require you to type all of your answers. The lowest homework grade will be dropped. If you miss a homework assignment for whatever reason, then expect that assignment to be the one that is dropped. NO MAKE-UP HOMEWORK ASSIGNMENTS OR EXAMS WILL BE GIVEN.

Term Paper & Presentation Everyone enrolled in this class is required to write and present a paper concerning any discussion/topic that is related with the second textbook (The Economics of the World Trading System). The paper must be typed, well-written and clear. More specifically, the paper should present an idea or event and discuss the current understanding of the situation. Each one of you must clear the paper topic with me no later than 24th February. Try to be specific in your topic, and then present a well-organized presentation of that topic. Please keep in mind that this is not original research. Therefore, make sure to attribute what you say to appropriate sources. You will be graded essentially on how much you teach me about the subject. The technical details for the term paper are the following: Title & name and a bunch of writing on the first page, max 5 pages (page 6 is the references). Type on Microsoft Word, use times new roman, 12 point font throughout, double spaced, one inch margins, number all pages. The paper is due on Tuesday March 22.

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The details for the presentation are the following: You will have 10 minutes for a PowerPoint presentation and 5 minutes for answering questions. The last four lectures of this class will be devoted exclusively to students PowerPoint presentations.

Grading Policy There will be one midterm and one comprehensive final exam. You must write a term paper and present it in class. Numerous homework assignments will be given to help everyone prepare for the exams. Class attendance is essential, for the homework assignments, presentations, and exams will be given in class. If you miss the midterm with a valid excuse, then the final exams will be reweighted. This goes only for the midterm. EVERYONE MUST TAKE THE FINAL EXAM. Worth percentage of the course grade: 1) One midterm, worth 25% of your grade. 2) One final comprehensive exam worth 40% of your grade. 3) Term Paper and Presentation worth 15% of your grade. 4) Active class participation worth 5% of your grade. 5) Homework assignments worth the remaining 15% of your grade.

Course Policies Courtesy: Please try to come in class on time and plan to attend for the entire lecture. Please turn your cell phones and other electronic devices off prior to entering the classroom and do not bring your laptop; you will not need it. Your attitude and participation in classes will determine border grades. Exam policies: No books, notes, problem sets, cell phones, BlackBerries, laptop computers, nor any other materials may be consulted during exams. You may not wear baseball caps, any other head gear, or iPods to the exam. You must also bring your Student ID to the exam. Make-up policy: It is important that each exam be taken at the scheduled time and date. No late make-up exams will be given. A legitimate excuse (the inability to leave work on time, oversleeping, lack of transportation, simple colds/headaches, fatigue, and so forth do not qualify as legitimate excesses) will be needed to qualify for an early make-up. A student who misses an exam should submit written documentation to qualify for a „no-grade‟ in an exam. Note: Any excusable absence must be documented by a verifiable source and I must be notified at least one week prior to the exam. If you are absent from an exam due to illness or emergency, you must notify me by e-mail within 24 hours after the exam, and verifiable documentation is still required. NO Late Homeworks will be Accepted. One homework assignment will be dropped (your lowest score), so if you miss one for an emergency, it may not have much affect, if any, on your grade. Grade Complaints: My grading system is 100% transparent. You can always inquire about your grade standing at any time. If you wish to drop from the course, do so before the deadlines. Pay attention to the following pleas (that the students usually use at the end of the semester): 1) “I need a (insert grade) or else I will get kicked off the (insert a sport) team”; 2) “I need a (insert grade) or else I will lose my scholarship or financial aid”; 3) “I need a (insert grade) or else I will be expelled from (insert school, club, or country)”. In each of these cases and others, no effort will be made to remedy the

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situation while there was still ample time in the semester. As a result, I can only assign the grade earned based on actual performance. FINAL GRADES ARE FINAL. They are not negotiable. Please do not request grades through e-mail, as they will not be provided. Cheating: The University has an honor code to ensure the academic integrity at UBC. Any student caught cheating on an exam or engaging in unethical behavior will receive a grade of F for the course and the dean will be notified and asked to pursue further action. (Be very careful: Cheating will not be tolerated; I take this matter very seriously).

Comments and suggestions I welcome your comments and suggestions for improving this class. You may speak with me in person, or send me an email, or leave an anonymous note in my mailbox in the economics department.

Tentative Course Schedule (Subject to change) Topics in Microeconomics Tuesday, January 4, 2011

Modern Industrial Organization

Thursday, January 6, 2011 Tuesday, January 11, 2011 Thursday, January 13, 2011 Tuesday, January 18, 2011 Thursday, January 20, 2011 Tuesday, January 25, 2011 Thursday, January 27, 2011 Tuesday, February 1, 2011 Thursday, February 3, 2011 Tuesday, February 8, 2011 Thursday, February 10, 2011 Tuesday, February 15, 2011 Thursday, February 17, 2011 Tuesday, February 22, 2011 Thursday, February 24, 2011 Tuesday, March 1, 2011 Thursday, March 3, 2011 Tuesday, March 8, 2011 Thursday, March 10, 2011 Tuesday, March 15, 2011 Thursday, March 17, 2011 Tuesday, March 22, 2011 Thursday, March 24, 2011 Tuesday, March 29, 2011 Thursday, March 31, 2011 Tuesday, April 5, 2011 Thursday, April 7, 2011

Syllabus and Introduction Ch 2. The firm and the costs Ch. 3. Perfect Competition Ch. 4. Monopoly Ch. 4. Dominant Firm with a Competitive Fringe Ch. 6. Oligopoly: Game Theory Lecture Notes: Game Theory: Common Knowledge Ch. 6. Game Theory: Mixed Strategies & Repeated Games Ch. 6. Cournot & Stackelberg Equilibria Lecture Notes: Oligopoly and Inter. Trade (Brander-Spencer Model) Ch. 7. Monopolistic Competition & Representative Consumer Model Ch. 7. Monopolistic Competition & Spatial Models Term Break, No Class Term Break, No Class Ch. 7. Monopolistic Competition & Hybrid Models Midterm Lecture Notes: Love of Variety (Dixit-Stiglitz model, 1977 AER) Lecture Notes: Love of Variety (Krugman model, 1980 AER) Lecture Notes: Love of Variety (Krugman model, 1980 AER) Lecture Notes: Melitz Model Lecture Notes: Melitz Model Lecture Notes: Export and FDI ((Helpman, Melitz and Yeaple model) Lecture Notes: Export and FDI ((Helpman, Melitz and Yeaple model) Ch. 14 Advertising and disclosure Ch. 14 Advertising and disclosure Ch. 18. International Trade Students’ PowerPoint Presentations Students’ PowerPoint Presentations

April 15

Final Exam: Cumulative Exam

GOOD LUCK!

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