Knowledge: By writing the term paper, you will be able to conduct and present a market analysis based on the topics that we cover in this class. By doing so, you will extend your knowledge on the following topics:
The market structure in the industry
The pricing strategies that are firms use
Type of competition in the industry
Sequential aspects of the industry
Collusion in the industry or price fixing cases
Mergers and acquisitions
Task: Your term paper should address most of the following questions below (if not all). This is an industry analysis, so you must present a market analysis at least based on the topics that we cover in this class. In the industry you pick, say collusion is the crucial issue, and you want to focus more on collusive behavior. Then, you can briefly mention other topics or with a small focus on them, and mostly focus on collusive behavior. If competition or price wars is the main issue, then you can put less weight on others and put more weight on competition or price wars, but you have to offer a complete analysis.
The topics that you should mention in your paper for a complete industry analysis:
1. Pick an industry to examine. Keep in mind that many industries are global in nature, so consumers and/or producers need not be in the US.
2. What can you find out about the market structure in your industry? Which firms are squarely in the industry, which others arguably produce substitutes or complementary goods?
3. What strategic pricing strategies are used? Price discrimination based on identifiable characteristics (3rd degree)? Two-part tariffs or menu pricing (1st or 2nd degree)? Bundling?
4. Returning to market structure, what does it look like? Do firms seem like they compete in price (Bertrand competition) or quantity (Cournot competition)? Are the goods homogeneous or differentiated (and along what dimensions)? Does there seem to be a simultaneous-move or sequential-move structure?
5. What sequential aspects does the industry have (if any)? Do any commitment strategies seem to be in use (such as strategic investments to large capacity or cost-reducing investment)? Is there any evidence of entry-deterring strategies or predatory pricing allegations?
6. Does there seem to be collusion in the industry? Has there been collusion historically? What aspects of the industry would help the firms collude (or hinder collusion)?
7. What has been the recent history in the industry with respect to mergers? Have the mergers been horizontal, vertical, or involving complementary products? Have there been any DOJ/FTC challenges of proposed mergers?
Format
Proper citation and referencing is very important!! Your final paper must adhere to MLA or APA citation guidelines—containing both a Works Cited and/or in-text parenthetical notations—in order to receive a passing grade. I repeat: papers that lack either a works cited, parenthetical citations, or both, will receive an automatic zero.
Only include references of papers that YOU mention in your paper. If you have any questions about how to correctly cite a source, please see the websites at the end of this section, or find sources on MLA or APA citation guidelines. (Pay attention to website citing)
It is plagiarism to use other writers’ words and IDEAS. You should cite any little data, statement, argument, research, conclusion, graph, picture, etc. that is not your own. Anything that is not yours, should be cited, otherwise it is plagiarism. For example, if you say “In the frozen pizza market, prices have increased 10% after company A and B merged” without citing, then it means this statement or data belongs to you, and I know that it is not yours!:) I do not expect an empirical research paper from you, so of course you will write your paper based on the information that you get from other sources. It is OK to do that, but it is not OK to get anything from other sources without properly citing the source.
There is not a page requirement or limit, but typical papers should be at least 4 pages (without a title or abstract page), double-spaced, 12-pt font, with additional, separate title page and reference page. Please include page numbers.