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Industry Economics

Course Description:

The course reviews structure, conduct, and performance of firms under market structures characterized by imperfect competition. The specific topics include but not limited to monopolistic and oligopolistic market structures; firm behaviour such as price discrimination, collusion, mergers, acquisitions; regulation.

                                                                                     Topics to be Covered


List of Topics

No. of


Contact hours

Topic I: Introduction to Industrial Organization(IO):

·         Introduction to IO

·         The Demand for IO


Topic II: Concentration Measures:

·         Concentration curve

·         Concentration ratio

·         Hirschman-Herfindahl index


Topic III: Identifying and Measuring Market Power:

·         Structure, Conduct, and Performance

·         SCP in Practice: The Framework

·         SCP in Practice: The Results

·         Critiques of SCP Studies

·         Product Differentiation


Topic IV: Market Power and Dominant Firms:

·         Monopoly: Sources of Market Power- Government Restrictions on Entry- Structural Characteristics- Strategic Behavior by Incumbents

·         Oligopoly: Game Theory- Foundations and Principles- The Basic Elements of a Game . Types of Games- Equilibrium Concepts

·         Classic Models of Oligopoly: Static Oligopoly Models- Cournot

·         Perfect Competition: Supply- Market Equilibrium- Market Power and Pricing- Measurement and Determinants of Market Power

·         Monopolistic Competition: Preference Specification- Monopolistic Competition: Equilibrium

Review and midterm test13

Topic IV: Firms Entry & Exit:

·         Entry Barriers: Positive Definitions of Barriers to Entry- An Assessment of Barriers to Entry- Normative Definitions of Entry Barriers

·         Why Do Firms Exist?- Explanations for the Existence of Firms- Alternative Economic Organizations- Contracts- Vertical Integration


Topic V: Advertising, Research and Development:

·         Normative vs. Positive Issues: The Welfare Economics of Advertising- Advertising and Strategic Entry Deterrence

·         A Positive Analysis: Strategic R&D- Market Structure and Incentives for R&D

Topic VI: Government industrial policies (Definition- Tools), Government industrial policy in Saudi Arabia13


Schedule of Assessment Tasks for Students During the Semester
 Assessment task (i.e., essay, test, quizzes, group project, examination, speech, oral presentation, etc.)Week DueProportion of Total Assessment
1In class/Online QuizWeek 5, 810%
2Individual Assignment / Report – participationOngoing, End of Semester15%
3Group Project/Portfolio/PresentationOngoing, End of Semester15%
4Midterm exam10 th week20%
5Final ExamEnd of the semester40 %


1. List Required Textbooks1.

Book | Essential:

•           Jeffrey Church, Roger Ware, “Industrial Organization: A Strategic Approach" ,  Irwin McGraw-Hill, 2000

1.      Book | Assistant:

•           John Lipczynski, John O.S. Wilson, John Goddard, “Industrial Organization Competition, Strategy and Policy", Fifth edition, Pearson Education Limited, 2018.

•             Dennis W. Carlton, University of Chicago & Jeffrey M. Perloff, University of California-Berkeley," Modern Industrial Organization, Global Edition, 4/E", Pearson,2016​​