RES-ECON 453: Public Policy in Private Markets

Example syllabus only – exact content subject to change. Please see your instructor’s syllabus for the current term for your specific course’s guidelines.

Instructor: Yongjoon Park

Course Objectives

This course surveys the broad set of laws and regulations that affect competition among firms in the United States, with a special emphasis on the consumer goods industry. Our purpose is to explore the economic rationale/models behind competition policy, the agencies that enforce this policy, and an overview of some important antitrust cases. The course is primarily devoted to antitrust policies – covering topics such as collusion, horizontal/vertical mergers, monopolization practices, etc.

General Course Information

Class meets on Tuesday and Thursday 10:00am-11:15am at Holdsworth Hall Room 305

Instructor and TA

Class Material

Lecture slides will be available prior to class. There is no required textbook for this course, however the following books will be useful.

• The Antitrust Revolution: Economics, Competition, and Policy , 7th Edition, by John E. Kwoka, Jr. and Lawrence J. White. We will use some cases from the 4, 5, and 6th editions. These cases will be posted to Canvas.
• Industrial Organization: Theory and Practice, by Don E. Waldman and Elizabeth J. Jensen

Integrative Experience

This course will satisfy the General Education Integrative Experience requirement for Resource Eco- nomics majors when taken with Res-Econ 394LI and Res-Econ 452.

“The Integrative Experience (IE) requirement at UMass Amherst addresses the challenges as- sociated with educational fragmentation. Positioned in the upper-division, the IE provides stu- dents with a structured opportunity to look back on their early college learning experiences, reflect upon and make connections between those earlier experiences and the more advanced work in their major, and use their integrated learning to prepare for the demands of the world beyond the University.”

In this class, you will practice the following two criteria of IE:

• You will participate in a group policy analysis project, which will offer you a shared learn- ing experience with your project teammates to apply your prior learning here at UMass Amherst to a real-world issue related to government regulation of markets.

• You will have the opportunity to practice GenEd learning objectives of critical thinking, col- laboration, and interdisciplinary perspective by completing research on your assignment with your teammates and by presenting your work to class.

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Department Learning Objectives

This course contributes to the following student learning objectives for undergraduate students in the Department of Resource Economics:

Student Learning Objective (SLO)

SLO #2: Understand and master microeconomics as a foundational theory.

SLO #4: Acquire a broad knowledge in related fields in order to be well-versed in current economic and policy issues.

SLO #5: Communicate effectively orally, in writing, and using current digital and multimedia technologies

Experiential Goal (EG)

EG #1: Enhance teamwork/collaborative skills through group work, activities, assignments, etc.

EG #2: Experience active learning strategies: flipped classrooms, debate, field trips, economic experiments and games, presentations, student-response system (e.g., Google Forms), etc.

Component(s) of the Course that Meet the objective:

• A wide range of Industrial Organization theories will be covered in the course. Current U.S. antitrust policies will be reviewed.
• Casework pre-recorded presentation/summary.
• Casework activity will a group activity.
• Student presentations will be expected in casework activity.

Class Schedule and Reading Materials

• Introduction/Course overview
• Microeconomics review (3-4 weeks)
  • Profit maximization, market structure (perfectly competitive market, monopoly market, oligopoly market)
  • Game theory (Nash equilibrium, Cournot and Bertrand models)
• Collusion (2 weeks)
  • Economic theories related to collusion, damage calculation
  • Lysine cartel case
  • Ohio milk case
• Horizontal mergers (2 weeks)
  • Economic theories related to collusion, horizontal merger guidelines Staples and Office Depot (1997)
• Vertical mergers (1-2 weeks)
  • Procompetitive/Anticompetitive aspects of vertical mergers 
  • Ticketmaster and Live Nation merger (2009)
• Monopolization practices (2 weeks)
  • Predatory pricing, exclusive supply, refusal to deal, tying
  • Microsoft Case
• Big-tech (1 week)

In addition, we will have a special speaker session. During this session, a guest who is actively involved in the antitrust community will generously share their valuable insights and experiences from the world of antitrust.

Work Expectations and Grades

Grades will be determined based on exam grades, homework, class participation, and your case presentation.

Exams (45%)

There will be two exams and their schedules are below.

• Exam 1 March 12, in class
• Exam 2 April 28, in class

Between the two exam scores, the lowest one will be worth 20% and the highest one will be worth 25% of the final grade. Makeup exams will only be permitted in the case of an unsurmountable situation (unexpected death of a family member, severe illness, etc.), in which case you will have to notify me at least 48 hours in advance and provide supporting documentation (e.g. Physician’s note).

Quiz (20%)

There will be 5 to 6 in-class quizzes designed to assess your understanding of the course materials. The quiz schedule will be announced at least one week in advance. Please note that the lowest quiz grade will be dropped, and no makeup quizzes will be offered.

Homework (10%)

Homework will consist of 5 to 6 assignments. Please be aware that these assignments will come in a diverse range of formats:

• Quantitative questions related to various competition models;
• Short-answer questions pertaining to antitrust cases; and
• One-page typed memos that discuss antitrust cases.

The lowest homework grade will be dropped. Consequently, late submissions for homework assign- ments will not be accepted.

Antitrust Case Project (25%)

This work is intended to satisfy the IE requirement, thus it is mandatory. There will be an in-person pre- sentation which will be done in groups of two to three students. You are free to form your own groups and will need to let me know who your group members are by September 17. There are two elements that contribute to your antitrust case grade.

Presentation (20%)

(Preparing presentation): Each group is to select an antitrust case from a collection that will be uploaded in Canvas. Groups are required to submit both their presentation slides and a one-page memo summarizing the case. To ensure full credit, these materials must be submit- ted to the instructor at least 24 hours before the scheduled presentation date. Below are the tentative presentation schedule.

March 24; March 26; April 30; May 5 and May 7

(On the presentation date): The one-page memo will be distributed to the class before the presentation. Each presentation should last approximately 15 minutes.

All group members will receive the same grade. You are responsible for managing internal group dynamics, including any conflicts that may arise during the preparation of the assign- ment. I will not serve as a mediator or take any action regarding disagreements over tasks or obligations.

Participation (5%)

5% of your antitrust case project grade is based on participation. This includes attending your peers’ presentations and completing a brief survey at the end of each presentation session.

Grading Table

Final grades will be calculated according to the following minimum cutoff points:

Academic Honesty Policy

Since the integrity of the academic enterprise of any institution of higher education requires hon- esty in scholarship and research, academic honesty is required of all students at the University of Massachusetts Amherst. Academic dishonesty is prohibited in all programs of the University. Aca- demic dishonesty includes but is not limited to: cheating, fabrication, plagiarism, and facilitating dishonesty. Appropriate sanctions may be imposed on any student who has committed an act of aca- demic dishonesty. Instructors should take reasonable steps to address academic misconduct. Any person who has reason to believe that a student has committed academic dishonesty should bring such information to the attention of the appropriate course instructor as soon as possible. Instances of academic dishonesty not related to a specific course should be brought to the attention of the appropriate department Head or Chair. Since students are expected to be familiar with this policy and the commonly accepted standards of academic integrity, ignorance of such standards is not nor- mally sufficient evidence of lack of intent (http://www.umass.edu/dean_students/codeofconduct/ acadhonesty/).

Academic Integrity Statement

UMass Amherst is strongly committed to academic integrity, which is defined as completing all aca- demic work without cheating, lying, stealing, or receiving unauthorized assistance from any other person, or using any source of information not appropriately authorized or attributed. As a com- munity, we hold each other accountable and support each other’s knowledge and understanding of academic integrity. Academic dishonesty is prohibited in all programs of the University and in- cludes but is not limited to: Cheating, fabrication, plagiarism, lying, and facilitating dishonesty, via analogue and digital means. Sanctions may be imposed on any student who has committed or participated in an academic integrity infraction. Any person who has reason to believe that a student has committed an academic integrity infraction should bring such information to the at- tention of the appropriate course instructor as soon as possible. All students at the University of Massachusetts Amherst have read and acknowledged the Commitment to Academic Integrity and are knowingly responsible for completing all work with integrity and in accordance with the policy: (https://www.umass.edu/senate/book/academic-regulations-academic-integrity-policy)

Accommodation Statement

The University of Massachusetts Amherst is committed to providing an equal educational oppor- tunity for all students. If you have a documented physical, psychological, or learning disability on file with Disability Services (DS), you may be eligible for reasonable academic accommodations to help you succeed in this course. If you have a documented disability that requires an accommo- dation, please notify me within the first two weeks of the semester so that we may make appropri- ate arrangements. For further information, please visit Disability Services (https://www.umass.edu/ disability/)

Title IX Statement

In accordance with Title IX of the Education Amendments of 1972 that prohibits gender-based discrimination in educational settings that receive federal funds, the University of Massachusetts Amherst is committed to providing a safe learning environment for all students, free from all forms of discrimination, including sexual assault, sexual harassment, domestic violence, dating violence, stalking, and retaliation. This includes interactions in person or online through digital platforms and social media. Title IX also protects against discrimination on the basis of pregnancy, childbirth, false pregnancy, miscarriage, abortion, or related conditions, including recovery. There are resources here on campus to support you. A summary of the available Title IX resources (confidential and non-confidential) can be found at the following link: https://www.umass.edu/titleix/resources. You do not need to make a formal report to access them. If you need immediate support, you are not alone. Free and confidential support is available 24 hours a day / 7 days a week / 365 days a year at the SASA Hotline 413-545-0800.