Industrial Organization Midterm
Concepts that could be on exam:

• Monopoly vs. Perfect Competition
• Different assumptions for the two markets (i.e., price taker vs. price maker) and how those lead to different results
• Why monopoly is "bad" -- i.e. loss of surplus, inefficiency
• Market Concentration: How to measure and/or evaluate measures
• Market Definition: Horizontal boundaries, vertical boundaries. Why it matters.
• Economies of scale: How to measure, where they come from.
• Economies of scope: How to measure, where they come from.
• Collusion: Types of collusion. Game theoretic model of collusion. Factors that encourage/inhibit collusion.
• Price discrimination: 1^st degree, 2^nd degree, 3^rd degree: Primary line vs. secondary line. How it can improve profits and/or efficiency.
• Tying: What it is and why a firm would do it. When is it illegal.
• Bundling: What it is and why a firm would do it.
• Game theory: Be able to set up and solve a matrix game and an extensive form game. Now definition of Nash Equilibrium and Subgame Perfect Equilibrium.
• Cournot: Know how to solve 2 firm. Know the implications of n-firm model.
• Bertrand: Know how to solve 2 firm. Be able to solve 2 firm with differentiated products model if you are given the demand function (like we did in class).
• Stackelberg: Know how to solve 2 firm. Be able to compare results to Cournot.