Courses, Economics Major | Northwestern University School of Professional Studies - Northwestern School of Professional Studies

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Economics courses carry social science credit.

ECON 350-CN : Monopoly, Competition and Public Policy

Description

This course focuses on a particular market failure - monopoly - in the context of antitrust law, public utility regulation, network effects, and intellectual property. First, profit-seeking firms may try to reduce competition through price discrimination, resale price maintenance, entry deterrence, predation, horizontal mergers, vertical integration, or collusion. We will use economic theory and landmark legal cases to study the purpose and development of antitrust law, which is meant to reduce the adverse effects of anti-competitive business practices. Next, large fixed costs of building and maintaining a physical network may generate natural monopolies in markets for electric power, cable television, natural gas, and water. We will explore the challenges regulators face when they attempt to apply market controls such as price caps so an essential service remains affordable. We will also ponder the proper role of government in today's digital economy, which features a number of winner-take-all markets, in which bandwagon effects result in convergence to a single operating system, recording technology, or social network. Finally, society might be willing to trade short-term welfare loss for long-term gains by granting temporary monopolies (e.g., patents or copyrights) to provide an incentive to innovate. We will analyze the ideal scope of artificial monopoly rights and the natural tension between intellectual property and antitrust law. Throughout the course we will explore the general topic of regulation and industry cases, both current and historical.

Prerequisites: ECON 281-CN, 310-A, 310-B.