Economics Question
Case studies of particular industries are an important tool of research in the field of Industrial
Organization. Analyzing an industry and its companies’ strategies in detail will give you a feel for how
real world firms and markets operate; it will also give you a chance to apply many of the theoretical ideas
that we discussed in this class.
The suggested timeline of the project and paper is the following:
overlapping topics. Note: the earlier you do this, the better the chances are for you to “get” that industry.
Confirm with me that the industry that you have chosen is not reserved by any group.
In this outline you may discuss:
- What industry your group picked and why
- Discuss the market in terms of horizontal, vertical, and geographic boundaries.
- Describe substitutes and complements.
- Discuss upstream and downstream industries, where applicable. (For example, if it is a
retail product, there is no downstream industry.)
- Write a brief history of the industry. Describe how and when it started. Discuss how the
industry has evolved over time.
Suggested deadline 2: March 18 – the updated version of your paper. You may discuss the following
aspects of your industry:
- Identify the major firms in the industry. Determine to the extent possible the relative
market shares of these firms.
- Discuss the cost structure of the industry. (Obviously, this will be a qualitative discussion – I
do not expect you to provide information on the cost functions that firms face.) What are
the significant cost factors (e.g., specific raw materials, R&D expenditures, etc.)? Are there
are economies of scale or economies of scope? Where do these economies come from (e.g.,
high entry costs, high R&D costs, etc.)?
- Discuss demand in the industry. Is it elastic or inelastic? (You probably won’t find much
evidence or information on demand – you will have to infer this from your knowledge of the
industry. For example are there close substitutes? Are the products necessities or
luxuries?) Is demand growing or declining? Do consumers have similar preferences or do
consumers differ a lot in preferences?
Suggested deadline 3: April 8 – the updated version of your paper.
You may discuss the following aspects of your industry:
- Discuss the degree of concentration in the industry using n-firm concentration ratios, Hindices, etc. (Choose the measure(s) that you believe to be the most descriptive given your
industry.)• Has the industry always been this concentrated, or has the level of concentration changed
over time? Have the top firms always been the same, or have the dominant firms changed
over time?
- Describe the nature/form of competition in the industry. Do firms compete on price or
quantity? How is advertising used? Assess the possibility of collusion in the industry. Refer
to the characteristics we discussed in class which may help or hinder collusion. Who are
potential entrants into the industry and what, if anything, is done to deter entry?
Final Deadline: April 29 –submit the Final Version of your paper.
You may discuss the following aspects of your industry:
- Describe/discuss any antitrust cases in your industry.
- If the industry is regulated, describe/discuss the nature of regulation. Include why the
industry is regulated and how such regulation has changed over time.
- Pick one defining feature of your industry that has not been the focus of earlier papers. For
example, if your industry were retail clothing you might want to focus on how direct
marketing through catalogs has affected the industry.
Guidelines for the Final Paper:
- Approximately 10-15 pages in length, typed, and double-spaced. The font size should be 12 pt. in
Times New Roman font. Margins – 1 inch from the top, bottom, left and right.
- Graphs, tables and figures should not take up more than 20% of the entire paper. Anything that is
in the Appendix will not be counted towards the total number of pages.
- References and citations should be listed at the end of the paper and they should not be counted
towards the total number of pages.
- Not obeying the above typing guidelines will result in a penalty.
- Spelling and grammatical errors should be avoided as they signal a lack of precision and attention
to detail.
- The due date for the paper is April, 29. Late papers will be penalized one letter grade per day.
You should anticipate that grading for this paper will be demanding yet fair.
- One core requirement for the paper is that you utilize some raw data in your analysis pertaining to
your chosen companies or industry. Raw data can be the data that you collected and documented
yourself, business data shared by the owner of the business that you analyze, or industry data
from various business/government databases. Twenty percent of your grade in this course will be based on the course paper.
Case studies of particular industries are an important tool of research in the field of Industrial
Organization. Analyzing an industry and its companies’ strategies in detail will give you a feel for how
real world firms and markets operate; it will also give you a chance to apply many of the theoretical ideas
that we discussed in this class.
The suggested timeline of the project and paper is the following:
overlapping topics. Note: the earlier you do this, the better the chances are for you to “get” that industry.
Confirm with me that the industry that you have chosen is not reserved by any group.
In this outline you may discuss:
- What industry your group picked and why
- Discuss the market in terms of horizontal, vertical, and geographic boundaries.
- Describe substitutes and complements.
- Discuss upstream and downstream industries, where applicable. (For example, if it is a
retail product, there is no downstream industry.)
- Write a brief history of the industry. Describe how and when it started. Discuss how the
industry has evolved over time.
Suggested deadline 2: March 18 – the updated version of your paper. You may discuss the following
aspects of your industry:
- Identify the major firms in the industry. Determine to the extent possible the relative
market shares of these firms.
- Discuss the cost structure of the industry. (Obviously, this will be a qualitative discussion – I
do not expect you to provide information on the cost functions that firms face.) What are
the significant cost factors (e.g., specific raw materials, R&D expenditures, etc.)? Are there
are economies of scale or economies of scope? Where do these economies come from (e.g.,
high entry costs, high R&D costs, etc.)?
- Discuss demand in the industry. Is it elastic or inelastic? (You probably won’t find much
evidence or information on demand – you will have to infer this from your knowledge of the
industry. For example are there close substitutes? Are the products necessities or
luxuries?) Is demand growing or declining? Do consumers have similar preferences or do
consumers differ a lot in preferences?
Suggested deadline 3: April 8 – the updated version of your paper.
You may discuss the following aspects of your industry:
- Discuss the degree of concentration in the industry using n-firm concentration ratios, Hindices, etc. (Choose the measure(s) that you believe to be the most descriptive given your
industry.)• Has the industry always been this concentrated, or has the level of concentration changed
over time? Have the top firms always been the same, or have the dominant firms changed
over time?
- Describe the nature/form of competition in the industry. Do firms compete on price or
quantity? How is advertising used? Assess the possibility of collusion in the industry. Refer
to the characteristics we discussed in class which may help or hinder collusion. Who are
potential entrants into the industry and what, if anything, is done to deter entry?
Final Deadline: April 29 –submit the Final Version of your paper.
You may discuss the following aspects of your industry:
- Describe/discuss any antitrust cases in your industry.
- If the industry is regulated, describe/discuss the nature of regulation. Include why the
industry is regulated and how such regulation has changed over time.
- Pick one defining feature of your industry that has not been the focus of earlier papers. For
example, if your industry were retail clothing you might want to focus on how direct
marketing through catalogs has affected the industry.
Guidelines for the Final Paper:
- Approximately 10-15 pages in length, typed, and double-spaced. The font size should be 12 pt. in
Times New Roman font. Margins – 1 inch from the top, bottom, left and right.
- Graphs, tables and figures should not take up more than 20% of the entire paper. Anything that is
in the Appendix will not be counted towards the total number of pages.
- References and citations should be listed at the end of the paper and they should not be counted
towards the total number of pages.
- Not obeying the above typing guidelines will result in a penalty.
- Spelling and grammatical errors should be avoided as they signal a lack of precision and attention
to detail.
