TERM:
Summer 2009

COURSE #:
MECN 430

SECTION:
71

COURSE NAME:
Microeconomic Analysis

INSTRUCTOR: Gerardo Jacobs  

CASEPACK - YES or NO?: Yes

FIRST ASSIGNMENT:
N/A

IS ATTENDANCE AT FIRST CLASS MANDATORY – YES OR NO?: No

1.  TEXT - REQUIRED or RECOMMENDED?:   No

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TERM:
Summer 2009

COURSE #:
MECN 430

SECTION:
72

COURSE NAME:
Microeconomic Analysis

INSTRUCTOR: Sujoy Mukerji   

CASEPACK - YES or NO?: Yes

FIRST ASSIGNMENT:
N/A

IS ATTENDANCE AT FIRST CLASS MANDATORY – YES OR NO?: No

1.  TEXT - REQUIRED or RECOMMENDED?:   No

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TERM: Summer 2009

COURSE #: MECN 441

SECTION: 71-76

COURSE NAME: Competitive Strategy & Industry Structure

FIRST ASSIGNMENT:          See Attached.

Required materials are available at the bookstore.       

Big Picture Readings:

Kay, J., "Strategy and the Delusion of Grand Designs," Financial Times, (September 27, 1999).
Morton, F.S., "Why Economics Has Been Fruitful for Strategy," Financial Times, (October 4, 1999)
SESSION 1: Price competition in oligopoly markets: product differentiation and competition
Readings:

1. Al-Najjar, N., “Notes on Strategic Interaction and Oligopoly,” (Kellogg School of Management).
2. Besanko, D., “Note on Product Differentiation and Price Competition in an Oligopoly,” (Kellogg School of Management).

Exercise (Not Collected):

1. Besanko, D., “Positioning the Gillette Sensor” (Kellogg School of Management)

SESSION 2: Price competition in oligopoly markets: factors that soften and toughen pricing rivalry
Readings:

1. Hay, G., "Practices that Facilitate Cooperation: The Ethyl Case," from The Antitrust Revolution, Kwoka, J. and L. White, ed., (Glenview, IL: Scott Foresman), 1989, pp. 183-197.
2. Morrison, S. A. and C. Winston, “Causes and Consequences of Airline Fare Wars,” Brookings Papers: Microeconomics 1996, pp. 85-123.

HW Exercise #1 (due NEXT WEEK)
Al-Najjar, N.I., “Price Competition with a Touch of Irrationality,” (Kellogg School of Management).
Cases:

1. Saraniti, B., The Hawaiian Airlines Industry 2001-2008 (Kellogg School of Management)
2. Besanko, D., The Mother of All (Pricing) Battles: The Airline Price War of 1992, (Kellogg School of Management)

 
Discussion Questions to Prepare:

The Mother of all (Pricing) Battles: The Airline Price War of 1992 &
The Big Kahuna of all (Pricing) Battles: Hawaiian Airlines 2006-08

These two cases present the story of two of the most brutal price wars ever to occur: the 1992 price war in the U.S. airline industry & the 2006-08 price war in Hawaii.  Our objective is to develop hypotheses about why these price wars occurred, with the ultimate objective of learning some general principles about the drivers of destructive pricing dynamics.

1. George Hay in his article “Practices that Facilitate Cooperation,” talks about complicating factors that make it difficult for an industry to avoid destructive pricing dynamics. What are the complicating factors in the airline industry in 1992?

2. What, by contrast, are the factors in the airline industry environment that would tend to facilitate a softer, less brutal price competition?

3. Putting yourself in the position of the management of Northwest Airline’s, would you have expected American to respond to your “Grown Ups With Kids Fly Free” promotion? 

INSTRUCTOR: Saraniti

CASEPACK - YES

IS ATTENDANCE AT FIRST CLASS MANDATORY –NO

1.  TEXT - none

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