Welcome to this second level, one semester, core unit on microeconomics and the organisation. The aims of the unit are.

  • to demonstrate the importance of economic analysis in our understanding of the organisation, whether it be in the public or private sector.
  • to illustrate that economists often offer different interpretations about the behaviour of firms and that this has implications for public policy

Unit Outline and Web Links

You can download the Unit Outline (pdf) for this course. Please stick to it carefully. These are set out below. You can also access the web links for this course.

You will need the following plug-ins to read the materials. Click on the icon to download it if you need to.

The Programme
Topics and Reading
Seminar/Web Activites
1 & 2

Topic Notes: Game Theory (pdf)

You will also benefit from seeing the following streaming audio slide show.

Prisoner's Dilemma Game Slide Show with Streaming Audio (Windows Media)

Directed Reading:

Besanko D and Braeutigam R R chapters 14, and 15 section 5 pps 657-668.

Varian chapter 17, 28 and 29.

On-Line Resources

Some useful On-line Primers: read this article from John Kay's website and Dixit and Nalebuff on Game Theory at the Library of Economics and Libert.

Visit Game Theory.Net

My Web Pages


1. Answer these multiple choice questions from Roger McCain's website.

2.Go to the eLearning Zone and answer the questions on Game Theory.


3 & 4

Topic Notes: Firms and Markets (pdf); Principal Agent Analysis (pdf)

Directed Reading:

Douma and Schreuder chapters 7, 8, 10 and 11.

Ricketts chapters 2 & 36 (difficult towards the end)

Schotter chapter 8

OnLine Resources

Two interesting On-Line primers from John Kay's website:On Profit Related Pay and On Company Law (with Aubrey Silberston)

You may also find this paper on information from Morgan Rose at the Library of Economics and Liberty very informative.

Visit Coase.org and read Ronald Coase's Nobel Lecture. Also visit Oliver Williamson's homepage where you will find an interview with the man himself (requires real player).

You should also visit Douglas C North's publications at www.ideas.repec.org. download the article on Transaction Costs over time, published in Economic History in 1994 (I would advise downloading the .pdf file)

Seminar on Firms and Markets


5 - 7

Topic Notes: Production (pdf); Costs (pdf)

Directed Reading:

Besanko D and Braeutigam R R chapters 6 to 9

Varian chapters 18 to 21

OnLine Resources

Visit the Digital Economist website and click on the links under Production and Cost Theory.

Some students are stuck with the basic calculus required for this and later subjects. Try the following link at Maths.net

eLearning Zone

Answer questions on production and costs.


8 & 9

Topic Slides: Competition and Monopoly (PPT); Monopoly Pricing (.PPT)

You will also benefit from listening to the following streaming audio slide shows:

Monopoly Profit (20 minutes).

Directed Reading:

Besanko D and Braeutigam R R chapters 9 -12

Varian chapters 22, 23 and 25

OnLine Resources

Two interesting primers on Competition and Monopoly: Jack High on Competition and George Stigler on Monopoly

Read George Stigler's Nobel Lecture

eLearning Zone

Answer the multiple choice style questions on The welfare effects of Monopoly and monopoly pricing.




Topic Slides: Cournot Oligopoly (PPT); Stackelberg and Bertrand (PPT)

You will also benefit from listening to the following streaming audio slide shows:

Cournot Oligopoly Equilibrium (13 minutes) and

Cournot and Welfare a diagrammatic explanation (13 minutes) or Cournot and Welfare: A numerical example (14 minutes)

Directed Reading:

Besanko D and Braeutigam R R chapter 13

Varian chapter 27

OnLine Resources

Have a look at David friedman's on-line chapter on Game theory and Oligopoly

eLearning Zone

Answer the multiple choice questions on Oligopoly.



Cournot with Conjectural variations

Price Leadership

Assessment 2: Multiple Choice Test. 30 questions to be answered in one hour (weight = 30 % of overall assessment for this unit). Download an example here.



Network Economics and the Information Economy.

Directed Reading:

Varian chapter 36

OnLine Resources


Assessment 3: 60 minute test. 1 essay from a choice of 2. Weighting = 40%. Download an example here (please note that I could only find a paper with 3 questions on it. You will only have a choice of 2. There is no mathematical question on the paper).

Buy the Textbook On-Line

I am advising the purchase of either

Besanko D and Braeutigam R R (2002) Microeconomics. An Integrated Approach, J Wiley and Sons, New York or

Varian H (2003) Intermediate Microeconomics. A Modern Approach, 6th edition, WW Norton and Company, London.

You can also purchase the set textbook on-line. Email the Well Read Bookshop or go to Amazon.co.uk. I will receive around 5% on every book sale which I will donate to the Parkinson's Disease Society.

You can order Besanko and Braeutigam by clicking here and Varian by clicking here.

Electronic Reading List

You can access the reading list for this course by clicking here.

A full Reading List is available in the Unit Outline (pdf).

  ©Kevin Hinde 1999 - 2004