Business Economics

Summary module description:
This module presents a number of lessons from theoretical industrial economics for our understanding of corporate decision-making - such as price-setting, output-setting, investment in productive capacity, advertising and collusive behaviour. In this context, the role of industrial competition is emphasised and both the determinants of market structure and the imperatives for competition policy intervention are discussed.

Aims:
The aim of this module is to:
- provide knowledge and understanding of the economic analysis that underlies the functioning of markets and industries and the behaviour of firms within them;
- to give students analytical skills to understand problems in business economics;
- to provide students with the ability to analyse competition policy questions in terms of their implications for social welfare and economic efficiency.

Assessable learning outcomes:
Students will be assessed on their ability to understand and apply economic analysis to the problems of modern business enterprises. This will include the ability to analyse: the determinants of market structure; the influence on corporate strategy of competition among rivals; the strategies of dominant firms and firms operating in oligopolistic markets.

Additional outcomes:
Students should be able to apply the techniques discussed to enterprises and markets in different countries and at different times.

Outline content:
On successful completion of this module students should:
- Understand optimal pricing behaviour by firms with market power, including various forms of price discrimination, limit and predatory pricing.
- Understand the basic determinants of market structure.
- Acquire a knowledge of the factors that determine the conduct of firms in terms of their price setting, advertising, R&D and other decisions.
- Develop an understanding of the way that economic analysis can lie behind the application of competition policy.
- Acquire a knowledge of the economic justification behind the potential need to intervene in markets and how this can be done effectively.

Brief description of teaching and learning methods:
A combination of lectures, seminar discussions of assigned topics and problems, and assessed essays.

Summative Assessment Methods:
Written exam 80%
Written assignment including essay 20%

Other information on summative assessment:
Two 1500 word essays or exercises due in the Spring term. Each essay or exercise has a weight of 10% in the overall assessment.

Formative assessment methods:

Penalties for late submission:
The Module Convener will apply the following penalties for work submitted late, in accordance with the University policy.
where the piece of work is submitted up to one calendar week after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for the piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days;
where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

The University policy statement on penalties for late submission can be found at: http://www.reading.ac.uk/web/FILES/qualitysupport/penaltiesforlatesubmission.pdf
You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Length of examination:
One 3-hour unseen written paper.
Part 3 examinations are held in the Summer term.

Requirements for a pass:
A minimum overall mark of 40%.