University of Toronto
Department of Economics
ECO380 Markets, Competition, and Strategy
Course Outline: Summer 2017
Updated May 15, 2017
Professor John McNeill ([email protected])
Office: 344 Max Gluskin House
Course Website on Blackboard (www.port
ECO380: Problem Set 1- For Tuesday, May 30th, 2017
A reminder:
Problem sets are due in class on Tuesday, May 30th, 2017.
You must submit a physical copy of your problem set.
Be sure to put your name and student number on your solutions - problem sets subm
ECO380 - Summer 2017
Prof. McNeill
Suggested Solutions:
The suggested solutions below are intentionally minimal; they are intended to help you judge whether you
have solved the problem correctly, not to teach you to solve the problem (that's what the lect
ECO380 - Summer 2017
Prof. McNeill
Extra practice problems:
In addition to the problems assigned in the tutorial sections, those on the problem set, and those found in
your textbook, here are some additional problems you could use to help study for your E
ECO380: Problem Set 1- For Tuesday, May 30th, 2017
A reminder:
Problem sets are due in class on Tuesday, May 30th, 2017.
You must submit a physical copy of your problem set.
Be sure to put your name and student number on your solutions - problem sets s
ECO380: Problem Set 2
For Thursday, June 22, 2017
A reminder:
Problem sets are due in class on Thursday, June 22.
You must submit a physical copy of your problem set.
Be sure to put your name and student number on your solutions - problem sets submitte
ECO380: Markets, Competition, and Strategy
Professor John McNeill
University of Toronto
Today:
Auctions
Matching Markets
Bounded Rationality
Next Week:
Shifting gears to Market Design
Before:
Behavior and strategy of rms under dierent market
structures
Go
ECO380: Markets, Competition, and Strategy
Professor John McNeill
University of Toronto
Today:
Dixit (the second half)
Auctions (Part 1)
From Last Class
Government anti-cartel regulations
The start of Dixit (predatory behavior - limit pricing)
Dixit s
ECO380: Tutorial Problem Set - For Tuesday, May 23, 2017: Suggested Solutions for Q2-Q4
Note: we are only posting solutions to those problems we did not have time to cover in tutorial.
Third-Degree Price Discrimination, First-Degree Price Discrimination
1
ECO380: Tutorial Problem Set - For Tuesday, September 27, 2016
Perfect Competition, Monopoly, and Third-Degree Price Discrimination
(4) [Monopoly-Price Discrimination] Suppose the monopolist from Problem 3 can price discriminate
between Type A and Type B
ECO380: Markets, Competition, and Strategy
Professor John McNeill
University of Toronto
Previously:
Sequential Games
When can rms make credible threats?
Subgame-perfect Nash equilibria - strategy must be optimal
in every subgame
Otherwise, threat (or
ECO380: Markets, Competition, and Strategy
Professor John McNeill
University of Toronto
Today:
Price Competition (Bertrand)
Capacity Constraints
Spatial models
Administrative Stu:
Accessibility Services is seeking a Volunteer Note Taker.
More information
ECO380: Markets, Competition, and Strategy
Professor John McNeill
University of Toronto
Today:
Monopoly and the monopolist's optimization problem. [Ch 2]
Non-uniform pricing [Ch 5]
Reminder: Calculus is in the appendix, and is required.
Foundational Ass
ECO380: Problem Set 1- For Wednesday, February 15th, 2017
A reminder:
Problem sets are due in class on Wednesday, February 15th, 2017.
You must submit a physical copy of your problem set.
Be sure to put your name and student number on your solutions -
ECO380: Markets, Competition, and Strategy
Professor John McNeill
University of Toronto
Today: Pricing Strategies II
(From last time) Welfare eects of Third-degree price
discrimination
First-degree price discrimination (perfect, or personalized
prices)
University of Toronto
Department of Economics
ECO380 Markets, Competition, and Strategy
Course Outline: Winter 2017
Updated January 10, 2017
Professor John McNeill ([email protected])
Office: 344 Max Gluskin House
Course Website on Blackboard (www.
ECO380: Tutorial Problem Set - For Tuesday, November 22, 2016
Dixit
1. [Dixit] In a given marketplace there is an incumbent who has a constant marginal cost of production
M C1 = 10. There is a potential entrant who has marginal cost M C2 = 3.6q2 . Market
P = 360
N
M C = 10
N =2
N = 3.
N =3
0.25Q
Q
P = 100 Q
2
M C = 12
F = 1000
q
q
F = 1000
= 0.95
q
q
C(q) = 40000q 2
K1 ,
M1
V1
P =A
w
r
A, B w,
r
F2
w
r
P = 900
Q
Q = q1 + q2
BQ
b(Vi ) = aVi
a
ECO380 Markets, Competition, and Strategy, Fall 2014
Problem Set #3
Problem 1. TomsonBook is the monopoly publisher which produces the textbook
Corporate Economics. TomsonBook sells in two separate markets, domestic market
and international market. The in
ECO380 Markets, Competition, and Strategy, Fall 2014
Problem Set #2
Problem 1. Two independent ice cream vendors own stands at either end of a 2
mile long beach. Everyday there are 200 beach-goers who come to the beach and
distribute themselves uniformly
ECO380 Markets, Competition, and Strategy, Fall 2014
Answer key for Problem Set #1
Problem 1. Suppose that, in a large city, 200 identical street vendors compete in a
competitive market for hot dogs.
1. The vendors total costs to produce q hot dogs is, C(
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ECO 380 F (Markets, Competition, and Strategy)
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ECO380 Review Package
Introduction to competition and strategy
Cournot Model
Bertrand Model
Hotelling Model
Stackelberg Model
Predation in Stackelberg
Collusion and cartels
Price discrimination
Bundling and Tie-in
Vertical Merger
Easy 4.0 Education Inc.
1
TERM TEST 1 SOLUTIONS
Question 1: [15 minutes] A monopolist faces demand of p(q) that is decreasing in quantity q and
has cost function C (q) = cq where c > 0. Note that demand is not necessarily linear.
(a) [2 points] Write out the monopolists maximizati