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SCHOOL OF ECONOMICS

FACULTY OF ARTS AND SOCIAL SCIENCES

ECOS2201
Economics of Competition and Strategy
Semester 1, 2012
Unit Coordinator: Andrew Wait
Email: andrew.wait@sydney.edu.au
Office: Room 358 Merewether Building
Consultation times: TBA
Class times: Monday, 1-4pm
Venue: Bosch Lecture Theatre 2

1.

Unit of study information

1.1.

School handbook description

This course introduces new and comprehensive methods for the analysis and formation of business strategy.
The unit analyses strategies for developing competitive advantages, including product differentiation, cost
advantages and product life cycles; implementing incentives, control, firm boundaries, and internal firm
decision-making mechanisms; implementing pricing, auction and signalling practices; assessing industry
attractiveness and the regulatory/trade practices environment; and managing industry cooperation and
conflict. Students are taught a set of tools that they can bring to bear on new problems. Understanding
competitive dynamics and strategic thinking are emphasised. Case studies and problem-solving form an
important part of the teaching method

1.2.

Pre-requisite units

ECON1001

1.3.

Assumed knowledge or skills

ECON1001

1.4

Learning situation and assessment overview

The Academic Board student workload for six credit point units equates to an average of 9-12 hours of student
effort per week per 13-week semester. This is what is expected of you. In this unit, topics are presented in the
first two hours of the lecture. The third hour is a workshop in which problems set the previous week are
discussed. Workshops begin in week 2. The assessment will be mid-semester exams and a final exam.

2.

Learning objectives and outcomes

2.1.

Aims of the unit

The key purpose of the Economics of Competition and Strategy is to enable students to analyse
and design business strategies. This unit of study uses some of the tools learned in ECON1001,
Introductory Microeconomics, and draws heavily on its conceptual foundations. It will provide a

ECOS2201 Economics of Competition and Strategy


strategists toolkit for more advanced study in business strategy. In addition, it will develop
problem solving skills that can be applied in students professional lives.

2.2.

Learning outcomes

The learning outcomes are:


1) Students should acquire the necessary skills to design and analyse business strategies
2) Students should develop problem solving skills
3) Students should develop written communication skills
4) Students will employ technologies effectively in gathering information from written, oral, and
electronic sources
5) Students should acquire the ability to manage, analyse, evaluate and use information
efficiently and effectively
The first two outcomes relate to the graduate attribute of Research and Inquiry, the third
outcome relates to the graduate attribute of Communication, and the fourth and fifth outcomes
to the graduate attribute of Information Literacy.

3.

Topic Schedule

Week 1 (5 March): Introduction and Industry Analysis


McAfee, Ch. 1, 2.
Week 2 (12 March): Industry Analysis (cont.) and Firm Strategies
McAfee, Ch. 2, 3.

Cabral, Ch.7, p101-104, p107-111.

Week 3 (19 March): Differentiation


McAfee, Ch. 4.

Cabral, Ch.16, p291-295.

Week 4 (26 March): Organizational Scope


McAfee, Ch. 7.
Cabral, Ch.11, p190-191.
Paul Milgrom and John Roberts, Economics,
Organization and Management, Prentice Hall, 1992, Ch.7, p206-222.
Week 5 (2 April): Incentives
McAfee, Ch. 8.
4 April: First Mid-semester exam Wallace Theatre- 6.05pm
9 April AVCC Common Week: No lecture
Week 6 (16 April): Cooperation
McAfee, Ch. 6. Aninash Dixit and Susan Skeath, Games of Strategy (2e), W.W.Norton, 2004, Ch.11, p345356.
Week 7 (23 April): Pricing
McAfee, Ch 11., Hal R. Varian, Intermediate Microeconomics (7e), Norton 2006, Ch.25, p444-456.
Dennis W. Carlton and Jeffrey M. Perloff, Modern Industrial Organization, (3e), 2000, Ch. 10, p307-312
Week 8 (30 April): Auction Experiment
Computer Lab 5, Economics and Business Building
Week 9 (7 May): Auctions
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ECOS2201 Economics of Competition and Strategy


McAfee, Ch. 12, William S. Neilsen and Harold Winter, Intermediate Microeconomics, Thomson, 1998, Ch.
14, 390-411.
Week 10 (14 May) Second Mid-semester exam (in class)
Week 11 (21 May): Project Selection
McAfee, Ch 7, pp.172-184., Hal R. Varian, Intermediate Microeconomics (7e), Norton 2006, Ch.13.
Week 12 (28 May): Signaling
McAfee, Ch. 13., Jeffrey M. Perloff, Microeconomics: Theory and Applications with Calculus, 2008, Ch. 18,
p634-642 and pp. 652-656.
Week 13 (4 June): Bargaining
McAfee, Ch. 14.

4.

Texts and Other Resources

Textbook: The textbook for this unit is


R. Preston McAfee, Competitive Solutions: The Strategists Toolkit, PUP, Princeton, New Jersey,
2002.
Another useful book is
Luis M. B. Cabral, Introduction to Industrial Organization, MIT Press, 2000

5.

Assessment

5.1

Assessment Schedule

Assessment items

Weight

Date

Mid-semester exam 1

20%

Mid-semester exam 2
Final exam

20%
60%

4 April 6.05pm
Wallace Lecture
Theatre
14 May in class
Final exam period

5.2

Detailed Assessment Information

Mid-semester Exams Coverage: announced in class


Final Exam All topics covered in all lectures and associated workshops.

5.3

Feedback

Feedback on assessments should be taken seriously to help you achieve your learning goals. In this unit you
will receive the following types of feedback:
Marks will be posted into the Blackboard Grade Centre when all results for an assessment have been
compiled. Marks will not be given by email or over the phone. Final marks will not be posted in Grade
Centre. Marks for online quizzes are available immediately upon completion and marks for midsemester exams will be available within one week of the exam.
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ECOS2201 Economics of Competition and Strategy

6.

Errors made in exams are typically identified on the paper. A summary of class-wide errors and
appropriate improvement action for each criterion is provided in class.
If you would like further feedback on an assessment task, you are encouraged to ask your lecturer after
class or during consultation hours.

Student feedback and evaluation

Student feedback plays a very important part in helping develop this unit and degree program in general.
Students are encouraged to approach the lecturer with feedback about the unit during the semester. Students
will also have the opportunity to fill-out a confidential unit of study evaluation for each unit of study in the
program at the end of the semester.

7.

University and Faculty Policies and Support

7.1

Attendance requirements and penalties for non-attendance


http://sydney.edu.au/arts/downloads/documents/policy/2009_Arts_Attendance_policy.pdf

7.2

Submission of work and academic honesty


http://sydney.edu.au/ab/policies/Academic_Honesty_Cwk.pdf

Academic honesty is important to protect students' right to receive due credit for work submitted for
assessment. It is clearly unfair for students to submit work for assessment that dishonestly represents
the work of others as their own and gain marks and degrees, which are not based on their own efforts
and abilities. Deliberate breaches of academic honesty constitute academic misconduct. These
breaches include: plagiarism, fabrication of data, recycling previously submitted material, engaging
someone else to complete an assessment on ones behalf and misconduct during supervised
assessments.
The penalties for academic misconduct may include: a mark of zero on the assessment; a fail grade in
the unit of study, additional assessment (including an unseen exam), and reference of the matter to the
University Registrar.
Academic dishonesty involves more than just copying material. Cooperation and helping other students
may at times trigger academic dishonesty proceedings if it appears you have worked too closely with
another student.
Individual assignments must be written and prepared alone. You may consult with other students
about ideas and possible research sources but the analysis and writing of the assignment must be done
alone. Group assignments should be prepared within the group. Students should contribute fully to the
group and take part in all group activities, contributing ideas, analysis and writing to the final product.
While students within the group should assist each other freely, students should not carry this level of
cooperation outside the group. One group may cooperate and help another group about ideas and
possible research sources but the analysis and writing of the assignment must be done by the group
alone.

7.3

Late work policy


Students must respect deadlines for assignments and should familiarise themselves with the Faculty
policy on late work, available at:
http://sydney.edu.au/arts/downloads/documents/policy/2011_Policy%20on%20Late%20Work.pdf

7.4

Special Consideration
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ECOS2201 Economics of Competition and Strategy


All applications for Special Consideration together with supporting documentation must be submitted
online at: http://sydney.edu.au/arts/current_students/online_application.shtml
Faculty policy
The Faculty of Arts and Social Sciences assesses student requests for assistance relating to completion
of assessment in accordance with the regulations set out in Part 5 of the University of Sydney Academic
Boards policy on Assessment and Examination of Coursework. Students are expected to become
familiar with the Universitys policies and Faculty procedures relating to Special Consideration and
Special Arrangements. A summary of the Faculty of Arts and Social Sciences regulations is available at:
http://sydney.edu.au/arts/current_students/special_consideration.shtml.
School of Economics policy
If an application for Special Consideration is approved, the following form of consideration will be
granted:

7.5

Assessment
Final exam
Class test / mid-semester test
Further test

Action taken by student


Did not attend exam
Did not attend the test
Did not attend further test

Second further test

Did not attend second further test

Consideration that will be granted


Further test (after end of semester exam period)
Further test (after end of semester exam period)
Second further test (start of following semester)
EITHER Grade of Absent Fail ( for repeated shortterm illness) OR grade of Discontinue (Not to count
as Fail) for ongoing serious illness or misadventure

Appeals against academic decisions


University policy http://sydney.edu.au/senate/policies/Ac_Appeals_Rule.pdf
Faculty Policy http://sydney.edu.au/arts/current_students/undergraduate_forms.shtml#appeals

7.6

Student Support
Faculty Policy http://sydney.edu.au/arts/current_students/student_support.shtml

7.7

Students with a disability


Students with a disability who wish to obtain reasonable adjustments for their disability must register
with and seek the support of the Disability Services Office.
A student who is registered with the Disability Services Office, and has in place reasonable adjustments
for a disability, may also make a separate claim for special consideration due to illness or misadventure
(see 7.4 above).

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