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School of Social Sciences

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BAEcon Economics
Learn how the social sciences can help you to understand today's world.

BAEcon Economics / Course details

Year of entry: 2018

Course unit details:
Business Economics II

Unit code ECON30821
Credit rating 20
Unit level Level 3
Teaching period(s) Semester 1
Offered by Economics
Available as a free choice unit? Yes

Overview

See course Blackboard pages.

Pre/co-requisites

Unit title Unit code Requirement type Description
Business Economics IB ECON20342 Pre-Requisite Compulsory
Microeconomics IIB ECON20352 Pre-Requisite Compulsory
Pre-requisites: ECON20342 OR ECON20352.

Students must have taken at least one of the following to be able to take this unit (compulsory Pre-Requisite):

  • ECON20342 or
  • ECON20352 or
  • ECON20000

IN ADDITION to at least one of the following (compulsory Pre-Requisite):

  • ECON10061 or
  • ECON10001 or
  • ECON10071

Aims

The course will provide students with the economic tools required to study imperfectly competitive industries. These skills will then be applied to study specific markets (in particular, the banking and healthcare sectors) and used to study in more detail certain aspects of firms’ behaviour (in particular, strategic delegation). The primary goal of the course is to show how simple economic tools can be used to shed light on current economic issues – a valuable skill for careers in both the public and private sectors, and in research.

Learning outcomes

At the end of this course, students should be able to demonstrate their understanding of oligopoly theory with homogenous and differentiated goods, and be able to apply these skills to study issues relating to (i) competition and regulation in the banking sector, (ii) strategic delegation inside firms, and (iii) strategic considerations regarding hospital competition and different payment schemes. 

Syllabus

Topic 1. Oligopoly Theory
This topic introduces the models from oligopoly theory that are used in the subsequent applications to, e.g., the banking and healthcare sectors. The models studied include Bertrand, Cournot and Hotelling.

Topic 2. Banking Competition and Regulation
This topic starts by reviewing the structure and components of the financial system at a broad level. It then studies the role of financial intermediaries (banks) within this system, and considers ongoing regulatory challenges relating to competition and stability in the banking sector. The final part of this topic uses a theoretical model to assess the relationship between capital requirements and harmful conduct on the part of dominant banks.

Topic 3. Strategic Delegation within Firms
This topic attempts to answer whether managers can be seen as a commitment mechanism in strategic competition. In other words, can managers be used to change the behaviour of rivals and achieve more profitable equilibria?

Topic 4. Economics of Vocation and Hospital Competition
In sectors such as education and health care workers tend to have some form of vocation towards their job. Essentially they obtain positive utility simply from performing the tasks that their job requires them to do. The effects of financial incentives (such as Pay-for Performance schemes) may vary dramatically if used on vocational employees.

 

Teaching and learning methods

Lectures and exercise classes.

Employability skills

Analytical skills
Synthesis and analysis of data and information.
Problem solving
Research
Planning, conducting and reporting on research
Other
Using library, electronic and online resources. Numeracy. Literacy. Computer literacy. Time management. Applying subject knowledge. Improving own learning.

Assessment methods

Method Weight
Other 20%
Written exam 80%
  • Mid-Term Exam - short open answers (20%).
  • Final Exam - short written answers (80%).

Feedback methods

  • Mock exam.
  • Online quizzes.
  • Class feedback.
  • Office hours.
  • Revision sessions.
  • Discussion boards.

Recommended reading

Preliminary readings

  • Carlton, D. and Perloff, J., 2005, Modern Industrial Organization (4th ed.)
  • Tirole, J., 1989, The Theory of Industrial Organization

Additional readings will be indicated by on the module Blackboard website.


 

Study hours

Scheduled activity hours
Assessment written exam 2
Lectures 18
Tutorials 4
Independent study hours
Independent study 176

Teaching staff

Staff member Role
Mario Pezzino Unit coordinator
Jacob Seifert Unit coordinator

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