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EC326
Andrew Harkins
Industrial Economics 2: Strategy & Planning
‘Open book’ nature means we cannot place restrictions on access to course
materials.
The exam will have the exact same structure as last year.
Exam Structure
2 Hour Exam - Two Sections:
Section A: 60 marks total
Two compulsory questions (30 marks each)
One from Week 1-5 , one from Week 6-10.
Section B: 40 marks total
Answer one question from a choice of two (40 mark question).
One question will be from Week 1-5 , the other from Week 6-10.
A Typical Exam Question (AH)
Take a seminar question and make some minor adjustments for part (a)
and (b).
(e.g. change the numbers in the payoffs)
Make another adjustment to the question for parts (c) and (d).
(e.g. change order of play, set prices rather than quantities, etc)
Mostly ‘solving’/’analytical’ questions (like the seminars).
Some questions may require discussion at the end.
(examples, applying insights from other areas of the module)
Tips
Revision focus should be:
1. Understand the lecture material
2. Revisit the seminar questions (without looking at the answers)
3. Look at some past exam questions and try to solve them.
4. (Extra reading from textbook chapters)
Look for:
Recurring themes, approaches, models.
Possible extensions/adjustments to models and seminar Qs.
More Tips
This is a 2 hour exam with 100 marks total.
1.2 minutes per mark.
Allowing 20 mins for reading/checking answers this means 1 mark per min.
Do not spend 45 minutes doing part (c) of a question worth 15 marks.
Remember the opportunity cost of your time.
Distinguish between ‘Discuss’/‘Describe’/‘Explain’ questions vs.
‘Solve’/‘Find’/‘Calculate’.
If you cannot finish or solve a question, give intuition/diagrams.
Do not leave a question blank.
Do not answer more than the required number of questions.
Topics (Part 1) –AH
1. Dynamic and multi-market monopoly
Durable goods, menu pricing, multiproduct pricing.
2. Information and reputation in markets
Signalling, reputation building, herding vs. observational learning, reviews.
3(a). Platforms and Two-sided Markets (1)
Network effects, demand for network goods, ratings and recommendations.
3(b). Platforms and Two-sided Markets (2)
Pricing network goods, Chicken and egg model, Winner takes all.
3(c). Platforms and Two-sided Markets (3)
Intermediated buyer-seller markets, platforms and sorting.
Topics (Part 2) – JG
1. Horizontal and vertical relations
Double marginalization, RPM, Two part tariffs, contracts, moral hazard, downstream
competition
2. Make or buy (vertical separation)
Costs of production vs. costs of incentives, Backwards induction
3. Quality games and quality reputation
Vertical differentiation, Strategic choice of quality in oligopoly, Asymmetric information
and quality premium, Long term vs. short term considerations
4. Judo economics
The advantage of being “small” in oligopoly games, The value of commitment