Economics 232
Industry and
Government
Fall 2001
MWF
10:00-10:50, FS 103
R.
N. Langlois
Office
hours MWF 11-12 or by appointment
About the course.
This course is about government
regulation of business firms. Unlike its companion course, Economics 267
(Industrial Organization), this course focuses on understanding public policy
rather than exploring theoretical questions in depth. We will still discuss --
and use -- economic theory, of course, since theory is essential to
understanding the policy issues.
Note: Class
will not meet on September 14, September 19, and November 30.
Course requirements.
Your grade will be based on two midterms and a
final.
Midterm 1
|
30% |
Midterm 2 |
30% |
Final |
40% |
The final will be cumulative, but will stress the material
covered after the second midterm. The exams will be mostly essay, but they may
also contain some matching, identification, or true/false components.
Read my lips: no makeups.
Readings.
I have asked the bookstore to order:
·
Dennis W. Carlton
and Jeffrey M. Perloff, Modern Industrial
Organization, third edition. Addison-Wesley-Longman, 1999.
In addition, I've asked the bookstore to
order as "recommended":
·
Richard A. Posner, Antitrust Law: An Economic Perspective.
University of Chicago Press, 1978.
Although I have not ordered it at the
bookstore, you may also want to get:
·
Robert Bork, The
Antitrust Paradox: A
Policy at War with Itself. The Free Press, 1995.
I will also place some readings on
reserve in Babbidge Library, and there are links below to as many readings as I
can place on line. (Please keep checking for updates.) The more reading you do,
the better you will do in the course. But the readings are an adjunct to, not a
substitute for, the class lectures. You will not do very well in this course if
you don't come to class regularly.
In addition, there is quite a lot of
information on the Internet about antitrust law and economics. Here are a few
key links to get you started.
Many articles available on the web are in
Adobe Acrobat (PDF) format. To read them, you will need the Adobe Acrobat
reader. This should already be installed on University microlab computers. But
if you don't have it, you can download it for free.
Note also that, for copyright reasons,
some links are accessible only from computers connected to the Internet through
the UConn domain. If you live off campus and are connecting through a private
ISP, check with the computer center about something called a proxy server.
Sequence of topics.
Part
1. Economic theory and antitrust.
A. Introduction and perspective.
B. Traditional theory.
The neoclassical theory of the firm
and its critics.
Industrial concentration and
concentration indices.
Barriers to entry.
C. The theory of networks.
Part 2. Antitrust law
and policy.
A. The historical and legal basis of
antitrust policy.
B. Mergers and market definition.
D. Price discrimination and predatory
pricing.
E. Tying and leveraging.
F. Exclusive dealing and boycotts.
G. Resale price maintenance.
H. Summing up: Antitrust enforcement
today.
Part 3.
Regulation and deregulation.
A. The economic theory of regulation.
B. Government regulation: case studies.
Electricity regulation.
·
Paul Joskow, "Restructuring,
Competition and Regulatory Reform in the U.S. Electricity Sector," Journal of Economic Perspectives 11(3): 119-138 (Summer 1997).
·
Vernon Smith, "Regulatory Reform in
the Electric Power Industry," Regulation 19(1) (1996).
Telecommunications regulation.